Moody’s upgrades Kerneos

Moody's Investors Service said it upgraded the corporate family rating of Kerneos Holding Group SAS to B1 from B2.

The agency also said it upgraded the rating on the senior secured notes due 2021 to B1 (LGD 4) from B2 (LGD 4) issued by the group's direct subsidiary, Kerneos Corporate SAS.

Moody’s also affirmed the company’s B1-PD probability of default rating and revised its outlook to stable from positive.

The upgrades recognize the company’s sound operating performance in the first half of 2016, resulting in strong growth in profits and significantly improved adjusted leverage and cash flow metrics, the agency explained.

With reported EBITDA increasing to €51 million in the first six months of 2016 from €43 million in the prior year, the company’s adjusted leverage reduced to 4.3x from 4.7x in fiscal year 2015, which met the leverage guidance for an upgrade, Moody’s said.

The upgrade was further prompted by the company’s improved free cash flow generation, which was negative in the last two years and increased to €11 million in the 12-months that ended in June, the agency added.

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