Moody’s turns Smurfit Kappa view to positive

Moody’s Investors Service said it changed the outlook for Smurfit Kappa Group plc to positive from stable.

“Our decision to change SKG’s rating outlook to positive reflects the company’s decision to raise €660 million of equity capital to finance increased investments in 2021-23. While additional funds will improve already strong credit metrics for the rating, we are looking for further evidence that a lower level of leverage can be sustained, as higher investments will also result in a very limited, if any, free cash flow generation post dividend payments in the coming few years,” said Vitali Morgovski, a Moody’s assistant vice president and lead analyst for SKG, in a press release.

Concurrently, Moody’s affirmed SKG’s Ba1 corporate family and the issuer’s probability of default rating at Ba1-PD. Moody’s also affirmed the instrument ratings of the senior unsecured and senior secured notes issued by SKG’s subsidiaries Smurfit Kappa Treasury Unlimited. Co., Smurfit Kappa Treasury Funding Ltd. and Smurfit Kappa Acquisitions at Ba1.

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