Moody’s alters Esselunga view to stable

Moody's Investors Service said it changed its outlook for Esselunga SpA to stable from negative and affirmed the Ba1 long-term corporate family rating, the Ba1-PD probability of default rating and the Ba1 instrument ratings on the €1 billion of senior unsecured bonds.

“The stabilization of Esselunga's rating outlook reflects the company's EBITDA recovery in the last 12 months ended June 2023. The company reported EBITDA in the first half of 2023 increased to €300 million from €214 million in 2022. The recovery has been driven by price repositioning in an inflationary environment. Moody's expects the ongoing recovery to bring Moody's adjusted debt to EBITDA close to 4x in the next 12 to 18 months, driven by the ongoing margins recovery and debt repayments in 2023 and 2024.

“The stabilization of the outlook also reflects Moody's expectation that Esselunga will have sufficient liquidity to repay the €500 senior unsecured notes due at the end of October 2023 without having to raise new debt,” the agency said in a press release.

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