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(Alliance News) - Moody's Investors Service on Monday has changed investment firm 3i Group PLC's outlook to stable from negative and affirmed the company's Baa1 long-term issuer and senior unsecured debt ratings.
The outlook was changed to reflect the "resilient" performance of 3i's private equity and infrastructure portfolios in 2021 despite the economic downturn prompted by the coronavirus pandemic. The ratings agency noted that, while economic uncertainties remain, 3i is well positioned to withstand them.
Moody's said 3i's Baa1 long-term issuer and senior unsecured debt ratings are supported by the firm's conservative balance sheet and liquidity management, low leverage and proven track record of investment and asset management. The ratings are constrained by the speculative grade and concentrated nature of 3i's investment portfolio.
Looking ahead, Moody's said 3i's ratings could be upgraded if there will be an improvement in the credit quality of the investment portfolio or portfolio concentration will be reduced. Also an increase in operating cash generation on a sustained basis can improve the ratings.
In contrast, 3i's ratings could be downgraded if there will be a significant increase in the company's leverage and a reduction in the firm's liquid resources. A material deterioration in the quality of the firm's investment portfolio, an increase in portfolio concentration and a structural decline in recurrent cash inflows, can also hurt 3i's ratings.
3i shares closed marginally lower in London on Monday at 1,159.31 pence each.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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