Moody’s changes Europcar view to negative

Moody’s Investors Service said it changed the outlook for Europcar Mobility Group and the rating on EC Finance plc’s notes to negative from under review. Moody’s started a review on Oct. 29.

“The negative outlook on EMG’s ratings reflects the risk that its credit metrics, notably Moody’s-adjusted debt/EBITDA and EBIT/Interest of around 5.1x and 1.2x respectively at year-end 2019 based on our estimates, will remain weak for the current B1 CFR over the next 12-18 months if continued soft market conditions lead to sustained market fleet overcapacity and price pressure,” said Eric Kang, Moody’s lead analyst for EMG, in a press release. “That said, we expect the company to be able to adjust in a timely manner its fleet size to protect utilization rates in the event of a material fall in demand thanks to the flexibility provided by the use of buyback and operating leases financings.”

Moody’s also confirmed Europcar’s ratings including the corporate family rating of B1 and the probability of default rating of B1-PD. Concurrently, Moody’s confirmed the B3 ratings on the senior unsecured notes due 2024 and 2026 at Europcar and the B1 rating on the senior secured notes at EC Finance.

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