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S&P raises ATS ratings
S&P said it upgraded the ratings on ATS Corp. and its senior unsecured notes to BB+ from BB.
“Our upgrade primarily stems from improvements in earnings and leverage. ATS in fiscal 2023 (ended March 31) generated S&P Global Ratings-adjusted debt to EBITDA of 3.1x, slightly higher than expected due in part to higher than anticipated working capital investments tied to new business wins in the electric vehicle (EV) market. However, the company meaningfully reduced leverage following its U.S. IPO, which closed in July 2023 and raised gross proceeds of about $283 million (about C$375 million),” S&P said in a press release.
ATS used about C$260 million to lower debt under its revolving credit facility, creating more financial flexibility for mergers and acquisitions. The agency noted, “We now expect leverage in fiscal 2024 to be about 2.2x and well within the 2x-3x range.”
The outlook is stable.
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