Moody’s rates Michelin notes A3

Moody's Investors Service said it assigned an A3 rating to Michelin Luxembourg SCS' note issuance of €600 million guaranteed by Compagnie Financiere du Groupe Michelin, "Senard et Cie" (A3/P-2), a 100% subsidiary of Compagnie Generale des Etablissements Michelin SCA (Michelin, A3/P-2).

The outlook is stable.

Moody’s said the rating reflects Michelin's strong competitive position, reflecting its scale, strength of its brand name and position as one of the three leading global tire manufacturers and solid financial metrics. Roughly 75% of Michelin's revenues are driven by replacement tire demand, which is strongly related to GDP growth but tends to be less cyclical than Original Equipment demand and allows for some pricing flexibility.

Consequently, Michelin has been able to generate consistently higher profit margins than many other auto suppliers and auto manufacturers, the agency said.

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