Research Update: Distributed Power Provider INNIO Group Holding GmbH Upgraded To 'B' On Improving Operating Performance; Outlook Stable

Austria-based INNIO Group Holding GmbH has demonstrated a steady recovery in its operating performance over the past year, thanks to its resilient service business and a recovery in new equipment sales. We expect INNIO to continue to benefit from the economic recovery and elevated oil and gas prices, which will support new equipment orders. Thanks to unfolding benefits from restructuring measures and continued growth in its high-margin service business, the group will be able to maintain an EBITDA margin of more than 17% and debt to EBITDA of less than 7x in 2022. INNIO also intends to issue a €322 million senior secured term loan B and use the proceeds to redeem all of its €262 million of second-lien debt,

...- Austria-based INNIO Group Holding GmbH has demonstrated a steady recovery in its operating performance over the past year, thanks to its resilient service business and a recovery in new equipment sales. - We expect INNIO to continue to benefit from the economic recovery and elevated oil and gas prices, which will support new equipment orders. Thanks to unfolding benefits from restructuring measures and continued growth in its high-margin service business, the group will be able to maintain an EBITDA margin of more than 17% and debt to EBITDA of less than 7x in 2022. - INNIO also intends to issue a 322 million senior secured term loan B and use the proceeds to redeem all of its 262 million of second-lien debt, as well as a 60 million loan from Oesterreichische Kontrollbank AG (OeKB), lowering its interest burden by around 6 million per year. - We therefore raised to 'B' from 'B-' our long-term issuer credit rating on INNIO, as well as our issue rating on the senior secured debt. The recovery...

Research Update