Research Update: Austrian Sensor Solutions Provider ams AG Assigned 'BB-' Rating; Outlook Negative

Austria-based sensor solutions provider ams AG increased its stake in German lighting manufacturer Osram Licht AG (OSRAM) to about 71% in July 2020, from 19.9%, for €1.77 billion. OSRAM's shareholders approved the domination and profit-and-loss transfer agreement on Nov. 3, 2020, which we expect will close by early 2021. This means ams will be able to reinforce its control and speed up OSRAM's integration and turnaround ahead of potentially increasing its stake to up to 100% over time. The acquisition temporarily weakens ams' credit ratios, with pro forma S&P Global Ratings-adjusted debt to EBITDA peaking at about 3.8x in 2020 before gradually returning to about 3.2x in 2021. We are assigning our 'BB-' long-term issuer credit rating to ams and

...- Austria-based sensor solutions provider ams AG increased its stake in German lighting manufacturer Osram Licht AG (OSRAM) to about 71% in July 2020, from 19.9%, for 1.77 billion. - OSRAM's shareholders approved the domination and profit-and-loss transfer agreement on Nov. 3, 2020, which we expect will close by early 2021. This means ams will be able to reinforce its control and speed up OSRAM's integration and turnaround ahead of potentially increasing its stake to up to 100% over time. - The acquisition temporarily weakens ams' credit ratios, with pro forma S&P Global Ratings-adjusted debt to EBITDA peaking at about 3.8x in 2020 before gradually returning to about 3.2x in 2021. - We are assigning our '##-' long-term issuer credit rating to ams and our '##-' issue rating to the unsecured notes. - The negative outlook reflects the possibility that we could lower the rating by one notch in the next 12 months if ams' adjusted debt to EBITDA exceeds 3.5x in 2021. This could happen if ams...

Research Update