S&P lifts Inovyn view to positive

S&P said it revised the outlook on Inovyn Ltd. to positive and affirmed the issuer credit rating at BB-.

The agency also said it affirmed the BB- rating on the company's term loan B.

The recovery rating is unchanged at 3, indicating 65% expected default recovery.

The outlook is positive.

Inovyn demonstrated solid operating performance in 2018 with adjusted EBITDA of €698 million and a high 20.8% adjusted EBITDA margin, S&P said.

The group benefited from top-of-cycle market conditions, supported by a significant improvement in its cost structure and successful delivery of synergies over recent years, the agency said.

The ratings are constrained by its exposure to cyclical end markets, which could pose significant risks in periods of economic downturn, the agency said.

This is only partially mitigated by the absence of large customer concentration with top 10 customers accounting for about 30% of sales, S&P said.

The positive outlook reflects an expectation that despite assumptions of mid-cycle conditions in 2019, Inovyn's adjusted debt-to-EBITDA ratio may reach 1.5x to 2x over the next 12 to 24 months, S&P said.

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