Moody’s lifts WEPA

Moody's Investors Service said it upgraded the long-term corporate family rating of WEPA Hygieneprodukte GmbH to Ba3 from B1, the probability of default rating to Ba3-PD from B1-PD and the instrument rating on the €600 million of guaranteed senior secured bonds maturing in 2026 and 2027 to B1 from B2.

“The rating action reflects a significant recovery in WEPA's credit metrics. The group's profitability is now exceptionally high, as we expect Moody's adjusted EBITDA margin in LTM Sep 2023 to be around 18%, which based on still inflated sales, results in over €300 million absolute EBITDA. In the previous record year 2020, the group's EBITDA was €184 million,” the agency said in a press release.

Moody’s added, “While external shocks in the last couple of years were admittedly extreme and the company's action plan and guidance points to lower volatility in the future, the swings in profitability and metrics will likely remain significant and constrain WEPA's credit profile.”

The outlook remains stable.

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