S&P revises Ovako view to stable

S&P said it revised the outlook on Ovako Group AB to stable from negative and affirmed its B- long-term corporate credit.

At the same time, the agency affirmed the B- issue rating on Ovako's €300 million senior secured notes maturing 2019. The recovery rating of 4 indicates expectations for average recovery prospects (30%-50%; rounded estimate: 45%) in the event of a payment default.

S&P said the outlook revision reflects Ovako's moderately improved S&P adjusted EBITDA at €57 million and slightly positive free operating cash flow generation (FOCF) in 2016, both of which compared favorably with 2015 figures.

The agency also noted Ovako's successful implementation of the cost-savings program so far, which was ahead of schedule in 2016, as well as lower adjusted debt to EBITDA (leverage) and stable liquidity characteristics. Adjusted debt to EBITDA came to 11 times as of end-2016 (or 6.7 times excluding the shareholder loan), but S&P expects it will come down to 8.5 times to 9 times by the end of the year.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.