S&P lifts Electrolux

Standard & Poor’s said it raised the long-term corporate credit rating on AB Electrolux to BBB+ from BBB.

The A-2 short-term corporate credit rating was affirmed.

The outlook is stable.

The agency also said it raised the short-term Nordic regional scale rating on Electrolux to K-1 from K-2.

The upgrade follows the termination of Electrolux’s agreement to acquire GE Appliances and its impact on the group’s financial risk profile, S&P said.

Although partly financed by share issuances, the $3.3 billion acquisition would have pushed Electrolux’s debt-to-EBITDA ratio to nearly 3x by year-end 2016, the agency said.

S&P also said it now forecasts that the ratio will be substantially lower than 2x, leading to a revision of the group’s financial risk profile to modest from intermediate.

The group’s anchor rating therefore improved to BBB+, leading to a long-term rating of BBB+ since the modifiers have no impact, the agency said.

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