Moody's upgrades Lenovo

Moody's Investors Service said it upgraded to Baa2 from Baa3 the issuer and senior unsecured ratings of Lenovo Group Ltd., and revised the outlook to stable from positive.

"The rating upgrade reflects Lenovo's improved credit profile in terms of leverage, driven by debt reduction and a higher level of EBITDA. We believe the company will sustain its improved credit profile through maintaining its leading market position in personal computers (PCs), supported by steady global demand for PCs," 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 excellent liquidity and improved debt leverage, which is strong for its rating category," added Ho.

Moody's said it projects Lenovo's adjusted EBITDA margin will be stable at about 5.8%-6% over the next 12-18 months compared with about 6%-6.2%, which is the range the agency expects the company to achieve in FY2022.

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