Moody's upgrades Resideo

Moody's Investors Service said it upgraded Resideo Funding Inc.'s corporate family rating to Ba2 from Ba3 and probability of default rating to Ba2-PD from Ba3-PD. Moody's also raised the ratings on Resideo's upsized first-lien senior secured term loan and revolving credit facility to Ba1 from Ba2, the rating on senior unsecured notes to Ba3 from B1, and the company's speculative grade liquidity rating to SGL-1 from SGL-2.

“The upgrade of Resideo's corporate family rating reflects the demonstrated strengthening of the company's credit metrics, including debt leverage below 3x, EBITA margin improvement toward 8.5%, interest coverage in the high single digits and free cash flow to debt in the mid-teens. Moody's expects the achieved level of improvement to be sustained over the next 12 to 18 months as the company's operating performance benefits from the support of favorable market demand conditions and growth prospects within its products & solutions and ADI global distribution business segments,” the agency said in a press release.

The outlook remains stable.

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