Moody's flips Tianqi outlook to positive

Moody's Investors Service said it changed Tianqi Lithium Corp.'s outlook to positive from negative and affirmed its Caa1 corporate family rating and Caa2 senior unsecured rating on the bonds issued by Tianqi Finco Co., Ltd. and guaranteed by Tianqi Lithium.

"The outlook revision to positive from negative reflects a meaningful improvement in Tianqi Lithium's operations in terms of revenue and profitability and a reduction in its debt level. These developments have lowered the company's leverage and improved its liquidity, and if sustained, will further strengthen the company's credit profile," said Gerwin Ho, a Moody's vice president and senior credit officer, in a press release.

Over the next 12-18 months, the agency said it estimates the company's profitability, as measured by EBITDA margin, will expand to around 79%-81% from about 71% in 2021, mostly reflecting robust lithium chemical prices and operating leverage.

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