Moody's changes Stow outlook to stable

Moody's Investors Service said it changed the outlook to stable from negative and affirmed the B3 corporate family rating and the B3-PD probability of default rating of Optimus BidCo SAS (Stow).

Concurrently the agency affirmed the B3 instrument ratings of the company's €75 million senior secured first-lien revolving credit facility and its €400 million senior secured first-lien term loan B and the Caa2 rating of its €85 million senior secured second-lien term loan.

“The change of the outlook to stable from negative and ratings affirmation reflect the company's progress in 2021 in improving its profitability despite tight steel availability on the market and a significant increase in steel prices, one of the company's major input cost positions. Unlike some of its manufacturing peers, Stow was able to quickly pass through this significant materials price increase to its customers, which resulted in a very strong rebound in its revenue in the first nine months of 2021,” Moody’s said in a press release.

The agency said it sees a strong bump in sales and gradual profitability recovery during 2022 that will support earnings and leverage reduction with Moody's-adjusted debt/EBITDA falling below 8x.

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