S&P shifts AI Convoy view to stable

S&P said it revised its outlook on AI Convoy (Luxembourg) Sarl (Cobham) to stable from negative and affirmed its B ratings. The recovery rating on the first-lien bank loans remains 3.

“Despite significant disposals that resulted in a smaller revenue and EBITDA base, Cobham's operating performance has remained resilient through 2020 and 2021, supported by robust demand from the defense industry. The company's remaining operating segments–advanced electronic solutions (AES, the largest by revenue), electrical and electronic equipment, communications & connectivity, and aviation services Australia–continue to exhibit good revenue and EBITDA generation,” the agency said in a press release.

S&P said it forecasts Cobham’s overall EBITDA margins to rise to above 20% this year and remain at about that level next year.

The outlook supports the forecast that through next year the company's good order book will support above-average EBITDA margins, reasonable free operating cash flow and a gradual reduction in leverage, the agency said.

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