Moody’s raises Cerdia

Moody's Investors Service said it upgraded Cerdia Holding Sarl’s ratings, including the company's long-term corporate family rating to B2 from B3 and probability of default rating to B2-PD from B3-PD. Moody's also upgraded the backed senior secured notes due February 2027 issued by its financing subsidiary Cerdia Finanz GmbH to B2 from B3.

“The upgrade reflects Cerdia's improved operating results, good volume visibility, and voluntary and mandatory debt reduction, which contributes to Moody's view that the company can sustain leverage and positive free cash flow commensurate with the B2 rating category. During 2024, Moody's expects debt reduction of $20 million based on required bond amortization and improving operating performance supported by Cerdia's stable customer base and high level of contracted volumes (in excess of 90% for 2024).

“Over the next year, Moody's estimates Cerdia's debt-to-EBITDA ratio around 3x, EBITDA interest coverage around 3x, and a free-cash-flow-to-debt ratio in the low double-digit percentage range,” the agency said in a press release.

The outlook for both firms remains stable.

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