Moody’s ups Freudenberg to A3

Moody's Investors Service said it upgraded the long-term issuer rating for Freudenberg SE to A3 from Baa1 and changed the outlook to stable from positive.

"The decision to upgrade Freudenberg's rating to A3 reflects the strong performance Freudenberg has delivered over the last three years and Moody's expectation that the company will sustainably meet the criteria set for an A3 rating," Oliver Giani, Moody's vice president, senior analyst and lead analyst for Freudenberg, said in a news release.

"The rating action also takes into consideration the company's recent decision to take full control of TrelleborgVibracoustic, the former joint venture with Trelleborg. Although the transaction is funded with cash, the assumption of debt will weaken Freudenberg's credit metrics in 2016 versus 2015.

“Nevertheless the transaction will add approximately €2 billion to the company's top line with profitability largely in line with the group's average and reduce lingering uncertainty regarding potential acquisitions," Giani added in the release.

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