Fitch: Smurfit Kappa to stable

Fitch Ratings said it revised the outlook on Smurfit Kappa Group plc's (SKG) long-term issuer default rating to stable from negative.

The agency also affirmed the issuer default rating and senior unsecured ratings of SKG, Smurfit Kappa Acquisitions and Smurfit Kappa Treasury Funding at BB+.

The actions follow the review of SKG's business and financial profile and trends in the packaging sector.

Fitch said the outlook revision reflects its expectation of continued stable cash flow generation and modest deleveraging driven by much slower acquisition activity in 2016 and lower capex, and despite increasing dividend payments.

The agency relaxed its funds from operations (FFO)-adjusted net leverage sensitivity for the ratings by 0.5 times, in recognition of the group's stable and improving business profile. It expects SKG's growth strategy will improve scale, diversification and exposure to regions with long-term growth, through mainly modest bolt-on acquisitions.

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