Moody's: Remy Cointreau outlook stable

Moody's Investors Services said it changed the outlook of Remy Cointreau SA to stable from negative and affirmed the ratings at corporate family rating at Ba2 and senior unsecured at Ba2, with a loss-given-default assessment at LGD4.

The outlook reflects improved underlying performance in the fiscal year ended March 31, Moody's said. The company benefited from focusing its business strategy on premium brands, from positive gains in the markets and from reduced leverage after some closings this year.

The Ba2 corporate family rating reflects the company's portfolio of brand name products and the general stability in its operations, the agency said.

The ratings also reflect the high reliance on its cognac business and its exposure to foreign currency fluctuations, Moody's said. The corporate family rating also is constrained by the company's leverage and its aggressive shareholder policy.

The stable outlook is based on stable industry conditions and the expectations that the company will continue to improve its margins and apply part of its cash flow generation to de-leveraging, the agency said. Moody's said the Ba2 rating and the stable outlook also considers Moody's view that Remy will maintain a ratio of debt to EBITDA between 4 times and 4.8 times over time.

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