Moody's: Hella to positive

Moody's Investors Service said it affirmed Hella KGaA Hueck & Co.'s ratings and changed its outlook to positive from stable.

The affirmed ratings include the Baa2 senior unsecured ratings assigned to Hella and Hella Finance International BV, a subsidiary of Hella.

Moody's also said it affirmed the company's P-2 short-term issuer rating.

The outlook revision reflects the gradual strengthening of Hella's key credit metrics in recent years and an expectation that those metrics will further improve over the next 12 to 24 months, the agency said.

Following the expected redemption of a €300 million bond in September 2017, Moody's said it estimates that leverage for the group will equate to 1.7x, somewhat lower than expectations for the current rating.

De-leveraging was primarily achieved through a combination of revenue growth, outperformance of the Hella group and an improvement in profitability, the agency said.

The ratings reflect the company's leading position in the lighting technology and original equipment electronics markets and its meaningfully sized aftermarket business unit, which is generally more stable than the original equipment business, Moody's said.

The ratings also consider the company's strong dependency on the automotive end market, which is highly cyclical, the agency said.

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