Moody’s revises Bayer view to negative

Moody’s Investors Service said it revised its outlook for Bayer AG to negative from stable and affirmed its senior unsecured ratings and senior unsecured MTN programs at Baa2 and (P)Baa2 respectively. Furthermore, Moody's also affirmed the rating of Bayer's preference stock hybrid notes at Ba1.

“The change of the outlook on Bayer reflects the potential credit impact of an accumulation of credit-negative events in the second half of 2023 with regards to i) recent awards of substantial punitive & compensatory damages in several trials related to Bayer's Round-Up herbicide and ii) the recent stop of the Oceanic-AF study in combination with iii) a significant downwards revision of EBITDA guidance and most notably free cash flow guidance in summer 2023,” the agency said in a press release.

Moody’s noted Bayer is now forecasting 2023 free cash flow levels of about break even in 2023, which including dividends, would translate into negative FCF.

Between December 2022 and September 2023 Bayer's reported gross debt has increased to €47.3 billion from €41.5 billion, in combination with lower EBITDA generation pushing its LTM Moody's adjusted gross leverage to 5.5x, which is a stark contrast compared to Moody's previous expectation of a further debt reduction,” the agency said.

On the positive side, Bayer has a higher cash balance compared to September 2022, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.