Moody's lifts Valid view to stable

Moody's Investors Service said it affirmed the global scale Ba2 rating and national scale Aa3.br ratings on Valid SA.

The outlook was revised to stable from negative.

The stabilization in Valid's outlook reflects the improvement in its credit metrics during 2018, driven by higher volumes and margins in most of its business segments, Moody's said.

The company's adjusted leverage measured by gross debt-to-EBITDA declined to 2.7x in 2018, from 3.1x in 2017, the agency said.

The better performance was supported by the economic recovery and increasing banking activity in Brazil, along with a stabilization in the U.S. payment business, Moody's explained.

The agency said it expects leverage to trend to lower than 2.5x over the next couple of years as a consequence of higher EBITDA generation, although margins should remain pressured by the mobile segment.

Top line growth will be mainly driven by a gradual recovery in the company's Brazilian operations and stability in the U.S. businesses, Moody's said, along with market share gains in the mobile segment.

The ratings also consider the company's diversification and strong local market position in all of its operating segments as a service provider for payments, identification and mobile, the agency said.

The ratings are constrained by Valid's small size in comparison with global peers, still challenging operating performance outlook and reliance on a small group of large clients in banking and telecom, Moody's said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.