Moody's upgrades Obrascon Huarte

Moody's Investors Service said it upgraded Obrascon Huarte Lain SA's (OHLA) corporate family rating to B3 from Caa1 and the company's probability of default rating to B3-PD from Caa1-PD. Concurrently, Moody's hiked the instrument rating of the €487 million guaranteed senior secured notes due 2026 issued by OHL Operaciones SAU, a wholly-owned subsidiary of OHLA, to B3 from Caa2.

“The upgrade of the CFR to B3 reflects (1) an almost €100 million debt reduction (equal to 15% of OHLA's Moody's-adjusted debt as of December 2021); (2) Moody's expectation that OHLA will further reduce its debt (including through mandatory repayment under the asset sale regime) and its EBITDA will gradually expand on increased economic activity in the construction business and profitability improvement - altogether resulting in deleveraging to around 4x-4.5x Moody's-adjusted debt/EBITDA over the next 12-18 months; (3) a strong order intake of around €3.7 billion in 2021, which provides some visibility into 2022-23 revenue; and (4) continued profitability improvement despite pressures from cost inflation,” the agency said in a press release.

“The two-notch upgrade of the guaranteed senior secured notes to B3 from Caa2 incorporates the repayment of the Spanish-government guaranteed loan, which ranked ahead of the bondholders in Moody's priority of claim analysis. Following this repayment in early 2022, the group's capital structure consists primarily of a single class of debt, and the instrument rating and CFR are therefore aligned,” Moody’s explained.

The outlook for OHLA and OHL Operaciones remains positive.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.