Moody’s raises Valeo, notes to Baa2

Moody's Investors Service said it upgraded Valeo SA's long-term issuer and senior unsecured ratings to Baa2 from Baa3 and commercial paper rating to P-2 from P-3.

The rating of the company's euro medium-term note program was upgraded to provisional Baa2 for senior unsecured notes and to provisional Baa3 for subordinated notes issuances.

The outlook was changed to stable from positive.

The action was triggered by Valeo's good financial performance during 2014 and the first quarter of 2015, reflected by 9.2% and 7% organic Original Equipment Manufacturers sales growth compared to 2.7% and 1% to 2% in global automotive production.

Strong and profitable organic growth over the past years and clearly in excess of market growth has allowed Valeo to further diversify its business set-up as well as to strengthen its financial profile.

Financial metrics as of year-end 2014 and as per Moody's definition position the company well within the requirements for the Baa2 rating, as evidenced by an EBITA-margin approaching 6% (5.8% as of December 2014), net debt/EBITDA of around 1.7 times and retained cash flow/debt of close to 40%.

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