Fitch downgrades Renault

Fitch Ratings said it downgraded Renault SA’s long-term issuer default rating and senior unsecured rating to BB from BB+. Simultaneously, Fitch withdrew the senior unsecured rating for commercial reasons.

“The downgrade reflects the sharp deterioration of key credit metrics in 2020 and our projections that a robust and sustained recovery will stretch beyond the rating horizon of the next two-three years. We expect key credit ratios to remain weak for the ratings until at least end-2022, with free cash flow (FCF) to remain negative in 2021 and increase to only about breakeven in 2022. This should lead funds flow from operations (FFO) gross and net leverage to remain well above 4x and 2x, respectively, through to end-2022.” Fitch said in a press release.

The outlook is negative.

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