Moody's upgrades Vista Outdoor

Moody's Investors Service said it upgraded Vista Outdoor Inc.'s corporate family rating to Ba3 from B1. Concurrently, Moody's upgraded Vista's probability of default rating to Ba3-PD from B1-PD, and upgraded its senior unsecured notes rating to B1 from B2. The speculative grade liquidity rating remains SGL-1.

“The ratings were upgraded because Vista's operating performance has materially improved, and Moody's expects that the company's credit metrics will remain robust over the next 12 to 18 months as strong demand for ammunition continues and the company works through its material backlog,” the agency said in a press release.

“Over the next 12-18 months, Moody's expects Vista's annual sales to continue to grow by high single digits while operating profits will continue to remain robust at around $250 million. Moody's also anticipates that the company will generate strong annual free cash flow of about $200 million with Moody's-adjusted debt to EBITDA maintained at between 1.5x to 2x,” the agency said.

The outlook is stable.

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