Moody’s ups Orion Engineered, loans

Moody's Investors Service said it upgraded Orion Engineered Carbons SA’s corporate family rating to Ba3 from B1 and probability of default rating to B1-PD from B2-PD.

At the same time, the agency upgraded the ratings of the €665 million equivalent term loan facility and €115 million multicurrency revolving credit facility borrowed by indirect subsidiaries Orion Engineered Carbons GmbH and OEC Finance US LLC to Ba3 from B1.

All outlooks are stable.

Moody’s said the action reflects Orion's positive operating and financial track record so far since its listing in July 2014, and the rating agency's expectation that the company will be able to display further positive momentum in its operating and financial performance over the coming quarters, which will then translate into: (a) An adjusted EBITDA margin materially higher than the recent historical peak of 16% achieved in 2014; (b) a gross leverage ratio, as adjusted by Moody's, sustainably below 3.5 times; and (c) positive free cash flows supporting the adequate liquidity profile of the company.

The action therefore anticipates the progressive migration of Orion's key metrics toward levels that are more commensurate with the Ba rating category, the agency said.

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