Moody's downgrades Flender

Moody's Investors Service said it downgraded Flender Holding GmbH’s corporate family rating to B2 from B1 and probability of default rating to B2-PD from B1-PD. The agency also lowered to B2 from B1 the instrument ratings of Flender International GmbH's €1.24 billion senior secured term loan B, €125 million senior secured guarantee facility, €80 million renminbi-equivalent senior secured term loan B2 and €170 million senior secured revolving credit facility. The outlook on all ratings has been changed to stable from negative.

"Today's rating action reflects our expectations that, given the difficult market conditions, Flender's key credit metrics will not be commensurate with a B1 rating," said Dirk Goedde, a Moody’s vice president and lead analyst for Flender, in a press release.

"The high deleveraging expectations following the debt-funded shareholder distribution in 2021 will most likely not being met given headwinds from supply chain disruptions, raw material prices, delay in wind projects and the challenge to fully pass on rising input costs to end-customers," Goedde added.

The improved outlook follows the view Flender can restore revenue growth and rising profitability so that Moody's adjusted leverage declines into the required guidance for the B2 rating category in the next 12-18 months, the agency explained.

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