INNIO Group Holding GmbH Upgraded To 'B+' On Improved Credit Metrics And Profitability; Outlook Stable

Austria-based distributed power provider INNIO Group Holding GmbH (INNIO) continued to demonstrate strong operating performance year-to-date. This is thanks to its resilient service business, new equipment sales, and a strong momentum in the oil and gas sector. We expect solid demand across all of INNIO's business lines and the management's ongoing cost improvement measures will support a gradual margin improvement to more than 19% in 2024, positive free operating cash flow (FOCF), and a reduction in leverage. At the same time, INNIO intends to amend and extend (A&E) its senior facilities by three years to 2028. The A&E transaction is leverage neutral because gross debt remains unchanged. We therefore raised to 'B+' from 'B' our long-term issuer credit rating on

...November 28, 2023 - Austria-based distributed power provider INNIO Group Holding GmbH (INNIO) continued to demonstrate strong operating performance year-to-date. This is thanks to its resilient service business, new equipment sales, and a strong momentum in the oil and gas sector. - We expect solid demand across all of INNIO's business lines and the management's ongoing cost improvement measures will support a gradual margin improvement to more than 19% in 2024, positive free operating cash flow (FOCF), and a reduction in leverage. - At the same time, INNIO intends to amend and extend (A&E) its senior facilities by three years to 2028. The A&E transaction is leverage neutral because gross debt remains unchanged. - We therefore raised to 'B+' from 'B' our long-term issuer credit rating on INNIO and our issue rating on the senior secured debt. The recovery rating on the senior secured debt remains unchanged at '3' (50%-70%; rounded estimate: 60%, versus 50% in our previous review). - The...

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