(Alliance News) - Moody's Investors Service on Friday has affirmed the Ba1 corporate family rating of manufacturer of paper-based packaging Smurfit Kappa Group PLC.
Concurrently, the rating agency has affirmed the issuer's probability of default rating at Ba1-PD and the instrument ratings of the senior unsecured and senior secured notes issued by Smurfit Kappa's subsidiaries at Ba1.
Moody's has changed its outlook on the Dublin-based company's debt rating to positive from stable.
"Our decision to change Smurfit Kappa's rating outlook to positive reflects the company's decision to raise 660 million of equity capital to finance increased investments in 2021-23," said Moody's analyst Vitali Morgovski.
"While additional funds will improve already strong credit metrics for the rating, we are looking for further evidence that a lower level of leverage can be sustained, as higher investments will also result in a very limited, if any, free cash flow generation post dividend payments in the coming few years," added Morgovski.
Moody's said Smurfit Kappa's rating is supported by its large scale, regionally diversified business profile with a leading market position in paper-based packaging. The outbreak of the global pandemic in the first half of 2020 had only a minor impact on the company's key credit metrics.
Smurfit Kappa shares were trading 0.2% lower in London on Friday at 3,150.00 pence each.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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Smurfit Kappa (SKG)