Bombardier Recreational Products Inc.

The stable outlook reflects S&P Global Ratings' view that BRP will maintain S&P Global Ratings' adjusted debt to EBITDA of about 2.0x-2.5x over the next 12 months, spurred by the strong performance from the company's current product portfolio and improving operating efficiency. At the same time, we anticipate the company's financial policy could lead to higher debt levels, which are offset by robust EBITDA growth, thereby supporting BRP's credit quality. We could lower the ratings if credit metrics weaken materially because of poor operating performance leading to adjusted debt to EBITDA approaching 4.0x or adjusted funds from operations (FFO) to debt approaching 20% over the next 12 months. Such a scenario could occur if competition intensifies in the recreational vehicle

...Expected EBITDA growth to support steady leverage measures over the next 12-24 months. S&P Global Ratings estimates Bombardier Recreational Products Inc.'s (BRP) adjusted EBITDA will increase by 8%-10% annually over the next 12-24 months, reflecting the strong performance of the company's year-round products, savings from the low cost of manufacturing, and platform savings from BRP's modularity approach. In addition, the rollout of new products and the company's increasing exposure to year-round products support steady EBITDA generation and reduced EBITDA volatility. Based on these factors, we forecast the company to maintain S&P Global Ratings' adjusted debt to EBITDA of 2.0x-2.5x, which is commensurate with the issuer credit rating....

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