Moody's upgrades Freudenberg debt

ERJ staff report (DS)

Frankfurt am Main,Germany -- Moody's Investors Service has changed the outlook on Freudenberg's Baa1 Issuer Rating to stable from negative. The Baa1 Issuer Rating has been affirmed.

Rainer Neidnig, lead analyst for Freudenberg, said: "The outlook change to stable reflects our increased confidence that Freudenberg will achieve a material improvement in credit metrics over the course of 2010 to levels of below 2.5x Debt/EBITDA which will adequately position the rating at the Baa1 rating level. We see this view substantiated by the recovery of the overall economic environment in the first half of 2010 and in particular by the marked recovery of automotive production volumes which still drive a substantial portion of Freudenberg's revenues. The outlook stabilisation considers also the group's demonstrated ability to preserve a solid liquidity cushion throughout the financial turmoil of 2008 and 2009."

Regarding Freudenberg's financing situation we note positively that Freudenberg's shareholder loans, which account for approximately half of the group's financial debt, proved to be a reliable source of funding also in the midst of the financial crisis. We further note, that Freudenberg recently entered into a new EUR 250 million syndicated credit facility with relationship banks which provides for a further solid liquidity situation.

This is an external link and should open in a new window. If the window does not appear, please check your pop-up blocking software. ERJ is not responsible for the content of external sites.

Press release from Moody's (link may need free registration at Moody's)