Fitch upgrades Michelin to A-

Fitch Ratings said it upgraded Compagnie Generale des Etablissements Michelin's (Michelin) and Compagnie Financiere du Groupe Michelin Senard et Cie's (CFM) long-term issuer default ratings and their senior unsecured ratings to A- from BBB+.

The outlooks are stable.

Michelin Luxembourg SCS’ senior unsecured rating was also upgraded to A- from BBB+.

Fitch affirmed Michelin's and CFM's short-term issuer default ratings as well as Michelin Luxembourg’s short-term debt at F2. CFM is the group's finance arm and the intermediate holding entity for Michelin's non-domestic operations.

Fitch said the actions reflect its revised view of the group's business and financial profiles relative to other automotive suppliers. Michelin derives a vast majority of its sales from the replacement market, which is more stable and profitable than the original equipment (OE) business.

In the agency’s view, the defensive attributes of leading tire manufacturers such as Michelin support the group's rating in the A category and enable it to benefit from greater headroom in key credit metrics, compared with similarly-rated auto suppliers but which demonstrate more volatile profitability.

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