Moody's shifts thyssenkrupp view to stable

Moody's Investors Service said it changed thyssenkrupp AG’s outlook to stable from developing and affirmed the B1 corporate family rating and the B1-PD probability of default rating. Moody's also affirmed the B1 ratings on the group's senior unsecured debt instruments.

"The outlook stabilization follows tk's decision to develop its Steel Europe (SE) business area on a stand-alone basis and prepare it for a prospective independent business in the coming years. The decision removes uncertainty regarding the group's future business profile and strategy in the near term, which had been reflected in the previous developing outlook," said Goetz Grossmann, Moody's lead analyst for tk, in a press release. "Furthermore, the outlook change reflects a gradually improving operating performance and a reduction of negative free cash flow generation, although the initiated turnaround of the steel operations will require intense restructuring. As a consequence of the ongoing implementation of efficiency measures in all divisions combined with an improving market environment, tk's operating performance and credit metrics are expected to strengthen further over 2021-2022. The rating affirmation also reflects tk's sound liquidity profile, which we expect to comfortably cushion ongoing negative free cash flow generation in the next 12-18 months," Grossman said.

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