Moody’s changes Fresenius view to stable

Moody's Investors Service said it changed the outlook on Fresenius SE & Co. KGaA's Ba1 corporate family rating and Ba1-PD probability of default rating to stable from negative.

Concurrently, the agency affirmed all the ratings of Fresenius and of its guaranteed subsidiaries.

The outlooks are stable.

Moody’s said the outlook revision reflects its expectation that Fresenius’ credit metrics will continue to reverting back to commensurate levels for the current rating category (i.e. adjusted Debt/EBITDA of around 4 times or below) within the next six to nine months supported by organic earnings growth, a focus on deleveraging as well as the earnings contributions from recent acquisitions.

Fresenius’ point-in-time credit metrics remain slightly elevated for the rating category as a result of the full consolidation of the Rhon-Klinikum acquisition debt whilst earnings from the acquisition have been only consolidated for respectively three months (10% of hospitals), seven months (20% of hospitals) and nine months (70% of hospitals). Fresenius Medical Care AG & Co. KGaA's (Ba1 stable) acquisition of Sound Inpatients for about $600 million at the end of the second quarter of 2014 is also weighing on consolidated point in time credit metrics of Fresenius, the agency said.

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