Fitch affirms Oberthur

Fitch Ratings said it affirmed Oberthur Technologies Group SAS' long-term issuer default rating at B and the senior secured debt rating assigned to the term loan B and the revolving credit facility at B+/RR3.

The outlook is stable.

Idemia is the new brand for the combined entity resulting from the merger of Oberthur and Morpho, which completed in May 2017.

Fitch said Idemia's progress toward deleveraging was delayed by difficult market conditions in 2017, particularly in the Connectivity Solutions and Payment Solutions divisions.

However, the affirmation of the rating with a stable outlook reflects the agency’s view that the acquisition of Morpho will strengthen Idemia's position in the trusted identities market and support its future deleveraging capacity and financial flexibility.

Fitch said it expects the reduction in leverage will come from EBITDA and free cash-flow growth supported by a healthy backlog in the group's main division (Government Solutions), the potential for higher/low-risk cost synergies than initially expected, the gradual reduction of restructuring costs over time and a disciplined M&A and financial policy.

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