Fitch upgrades SKF

Fitch Ratings said it upgraded SKF AB's long-term issuer default rating and senior unsecured rating to BBB+ from BBB.

The outlook is stable.

The upgrades reflect SKF's stronger financial profile as a result of further improved operating performance, which has enabled de-leveraging to a level commensurate with a higher rating, Fitch said.

Other credit strengths include the diversified manufacturing company's market-leading position, diversified customer base and adequate aftermarket business providing stability in the form of recurring revenue, the agency said.

Fitch said it believes revenue and earnings could come under pressure in case of a worse-than-expected recessionary environment in 2019 and 2020, but the company has sufficient flexibility to accommodate a moderate erosion in profitability without triggering our negative sensitivities.

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