Moody's revises Lenovo view to positive

Moody's Investors Service said it changed Lenovo Group Ltd.'s outlook to positive from stable and affirmed its Baa3 issuer and senior unsecured ratings.

"The positive outlook reflects our expectation that Lenovo will maintain its leading market position and improved EBITDA generation over the next 12-18 months, supported by favorable global demand prospects for personal computers (PC)," said Gerwin Ho, a Moody's vice president and senior credit officer, in a press release.

"In addition, we expect the company's continued disciplined financial management will help it to maintain its improved debt leverage, which is strong for its rating category, and its excellent liquidity," added Ho.

The agency said it forecasts Lenovo's adjusted EBITDA margin will be steady at about 5%-5.2% in the next 24 months from about 5% in fiscal 2021, mirroring greater economies of scale and improved profitability in its smartphone and server businesses.

Moody's nicks two National Grid units

Moody's Investors Service said it downgraded the long-term issuer and senior unsecured ratings of KeySpan Gas East Corp. (Kedli) to Baa1 from A3, and the Brooklyn Union Gas Co. (Kedny) to Baa2 from Baa1. The agency changed both companies’ outlook to stable from negative. National Grid plc owns both utilities.

“This rating action follows the May 14, 2021, filing by the companies of their joint proposal (proposed rate case settlement) [1] with the New York energy regulator, the Public Service Commission (PSC), for a three-year rate plan running from April 2020 - March 2023. It is envisioned that the PSC will approve the settlement in August with the new rate plan applying retrospectively from Aug. 1, 2021. A true-up (make-whole provision) will take account of the delay in implementing updated rates,” Moody’s said in a press release.

“The stable outlook reflects Moody's expectation that (1) a rate case settlement will be enacted in summer 2021 which contains no material changes to the joint proposal filing; and (2) both Kedli and Kedny will maintain a financial profile over the remaining primary term of this rate plan in line with guidance for the current rating,” the agency said.

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