Moody's assigns Aliaxis, bonds Baa3

Moody's Investors Service said it assigned a Baa3 long term issuer rating Aliaxis Holdings SA. Concurrently, the agency gave a Baa3 backed senior unsecured rating to the planned benchmark seven-year bonds to be issued by Aliaxis Finance SA. The outlook is stable.

Moody’s noted Aliaxis’ diversification in terms of end-market exposure with a large share of revenue generated with relatively stable infrastructure and renovation spending, history of conservative financial management and resilient credit metrics during downturns and its level of Moody's adjusted net leverage of around 0.9x in the first half 2021 that offers room for targeted growth organically as well as through acquisitions.

However, these factors are offset by execution risks related to the envisaged organic and inorganic growth strategy, which also includes risks associated with potential entrance into new emerging markets and intentional re-leveraging to capture growth opportunities however within the stated leverage ceiling of up to 2x-2.5x net leverage, limited vertical diversification with relatively commoditized products.

Aliaxis will use the proceeds in a refinancing.

“The stable outlook on the ratings reflects our expectation that the company will manage its expansion plans within its stated leverage guidance (net leverage peak up to the 2.x-2.5x range), which broadly corresponds to the Moody's adjusted gross leverage ratio of below 3x - 3.5x,” Moody’s said in a press release.

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