Moody’s lifts James Hardie, notes to Ba1

Moody's Investors Service said it upgraded James Hardie International Finance Ltd.’s corporate family rating to Ba1 from Ba2, probability of default rating to Ba1-PD from Ba2-PD and $325 million 5 7/8% senior unsecured notes due 2023 to Ba1 from Ba2.

The speculative grade liquidity rating was affirmed at SGL-2.

The outlook is stable.

Moody’s said the upgrade of the corporate family rating to Ba1 reflects its expectation that James Hardie will continue to exhibit relatively conservative balance sheet management, financial policies that are now anticipated to be more aligned with the needs of the creditors and disciplined yet growth oriented approach toward operations.

This financial management has resulted in the company's ability to maintain strong credit metrics for a pro-longed period of time.

The agency projects debt to EBITDA to be maintained below 1.5 times and EBITA/interest expense above 10 times over the next 12 to 18 months. As of the fiscal year end 2016 (March 31), debt/EBITDA stood at 1.3 times and EBITA/interest expense at 10.8 times.

Furthermore, James Hardie is anticipated to turn free cash flow positive over the next year as it curtails its special dividend payouts while still maintaining its normal historic annual dividend payout, 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.