Moody’s upgrades Europcar

Moody’s Investors Service said it upgraded Europcar Groupe SA’s corporate family rating to B1 from B3 and probability of default rating to B1-PD from B3-PD.

Moody’s also said it changed the instrument rating to definitive B3 from provisional B3 on the €475 million senior notes due 2022, the obligations of which have been transferred to the company from Europcar Notes Ltd. after the completion of Europcar Groupe’s initial public offering.

The agency also said it upgraded the instrument rating on EC Finance plc’s €350 million senior secured notes due 2021 to B2 from B3.

The outlook is stable.

The upgrades follow the Paris IPO of Europcar with 50.3% of the share capital now in public ownership with Eurazeo, the agency said, and ECIP Europcar Sarl holding the remaining 49.7% before the use of an over-allotment option exercisable until July 24.

The ratings reflect the company’s improved credit metrics following its IPO, the proceeds of which were used to reduce its outstanding debt, Moody’s said.

The ratings also consider an expectation that Europcar will experience further improvement in metrics in 2015 driven by the positive growth momentum, the agency said.

However, Moody’s noted that de-leveraging will be limited as improved operating performance will be partly offset by additional drawings under the asset-backed fleet financing to fund the increasing fleet base.

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