Moody’s revises Roehm view to negative

Moody’s Investors Service said it changed the outlook for Roehm Holding GmbH to negative from stable. The agency also affirmed the B2 corporate family rating, the B2-PD probability of default and the B2 instrument rating for the term loan B and revolving credit facility.

“The outlook change to negative from stable reflects the widening guidance of 2019 EBITDA of between €300 million and €344 million. The midpoint of €322 million is below Moody’s initial EBITDA expectation for 2019 of €339 million and below the €344 million management had expected in its business plan. The assumed profitability shortfall translates into a Moody’s-adjusted leverage of around 6.7x compared to initial expectations of 6.4x for 2019. The negative outlook also reflects the weaker outlook for key end markets such as the automotive, electronics and coatings sectors,” the agency said in a press release.

Moody’s affirmed the B2 rating as the company maintains high margins of around 19.7% for the last twelve months ending in September despite a price normalization and weaker demand. In addition, Roehm retains a solid liquidity profile supported by positive free cash flow generation. These factors are partially offsetting the higher than expected leverage, Moody’s said.

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