Moody's upgrades Europcar Mobility

Moody's Investors Service said it upgraded Europcar Mobility Group SA’s probability of default rating to Caa2-PD from Ca-PD and affirmed the Caa2 corporate family rating. The agency also upgraded the guaranteed senior secured notes due 2022 at EC Finance plc to B3 from Caa1. The outlook on both entities has been changed to positive from negative.

"The restructuring of the company's corporate debt has reduced its indebtedness and improved liquidity, but the company is still highly leveraged and the speed at which demand, and therefore earnings and cash flow will recover, particularly over the summer months, remains uncertain given continuing mobility restrictions in Europe," said Eric Kang, a Moody's vice president, senior analyst and lead analyst for EMG, in a press release. "Under our base case forecasts, the liquidity buffer could become limited in 2022 in the absence of a material recovery in earnings and free cash flow over the next 12-18 months."

The positive reflects the expectation that EMG's operating performance will gradually improve over the next 12-18 months, the agency said.

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