Moody’s revises Oberthur to negative

Moody's Investors Service said it changed the outlook on the ratings of Oberthur Technologies Group SAS (Idemia) to negative from stable.

Concurrently, the agency affirmed the B2 corporate family rating and B2-PD probability of default rating.

In addition, Moody's affirmed the B2 rating of the €2.1 billion senior secured term loan B due 2024 and B2 rating of the €300 million senior secured revolving credit facility due 2023 borrowed by Oberthur Technologies Group SAS, Oberthur Technologies of America Corp. and Oberthur Technologies SA.

"The decision to change the outlook on Idemia's ratings reflects the company's weaker than expected operating performance in 2017, leading to a sustained high leverage of 7.0x," Colin Vittery, Moody's vice president, senior credit officer and lead analyst for Oberthur, said in a news release.

"The poor revenue outlook for 2018 as US adoption of EMV (chip and pin) bank cards remains subdued and mobile telecom SIM prices are impacted by an industry price war means that the expected improvement in profitability is highly dependent on cost synergy delivery from the Morpho acquisition."

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