Fitch upgrades Ecore

Fitch Ratings said it raised Groupe Ecore Holding SAS' long-term issuer default rating and senior secured notes to B from B- and placed the ratings on rating watch positive. The recovery rating for the senior secured notes is RR4.

“The upgrade reflects fading risks from the coronavirus pandemic and forecast free cash flow (FCF) on average of close to €15 million per annum over the next four years. This will allow the group to reduce net debt over time to around €200 million (excluding leases, but including factoring, in accordance with Fitch's criteria), while maintaining funds from operations (FFO) gross leverage at 5.5x-6x. Our financial forecast is based on our expectation that commodity markets will moderate over the medium term towards mid-cycle, supported by economic stimulus and decarbonization policies,” Fitch said in a press release.

The RWP is pending the acquisition of Ecore by higher-rated Derichebourg SA. “Ecore's rating could benefit from our assessment of the linkage with its future parent under our parent and subsidiary linkage (PSL) rating criteria,” the agency added.

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