Fitch downgrades Elis

Fitch Ratings said it downgraded Elis SA's long-term issuer default rating and senior unsecured and euro medium-term notes program rating to BB from BB+.

The outlook remains stable.

The downgrades reflect the slower-than-expected de-leveraging path post the Berendsen acquisition completed in September 2017, Fitch explained.

Although the group still exhibits good de-leveraging capacity based on the high profitability and free cash flow generation, this is not enough to mitigate a leverage level commensurate with a BB+ issuer default rating for at least four years, the agency said.

The group's business profile, market position and diversification also have improved with the Berendsen acquisition and are aligned with a stronger credit profile, which supports the stable outlook, Fitch said.

Elis has market leadership in rental services of flat linen, work clothes, hygiene and well-being equipment in most of their markets, the agency said.

The company shows a geographically diversified profile, Fitch said, and also benefits from a high visibility of revenues from medium-term contracts with a high renewal rate.

© 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.