Research Update: Euroclear Bank 'AA/A-1+' Ratings Affirmed On Resilient Business Income And Reducing Leverage; Outlook Stable

Euroclear will likely continue to report strong underlying profitability in 2023 and 2024, reflecting resilient business income, and strongly supported by interest and banking income in the current high interest rate environment. We do not expect the group to engage into any sizable or transformative debt-funded acquisitions. As a result of the strong cash-flow generation, based on favorable underlying performance, and achievement of some decline in net debt, S&P Global Ratings-adjusted debt to EBITDA for the Euroclear group is set to decrease to 0.5x-1.0x and funds from operations (FFO) to debt to increase to above 100% in 2023-2024. We consider that the group's creditworthiness continues to compare well with 'AA' rated peers. Therefore, we have affirmed our 'AA/A-1+' long- and

...- Euroclear will likely continue to report strong underlying profitability in 2023 and 2024, reflecting resilient business income, and strongly supported by interest and banking income in the current high interest rate environment. - We do not expect the group to engage into any sizable or transformative debt-funded acquisitions. - As a result of the strong cash-flow generation, based on favorable underlying performance, and achievement of some decline in net debt, S&P Global Ratings-adjusted debt to EBITDA for the Euroclear group is set to decrease to 0.5x-1.0x and funds from operations (FFO) to debt to increase to above 100% in 2023-2024. - We consider that the group's creditworthiness continues to compare well with '##' rated peers. - Therefore, we have affirmed our '##/A-1+' long- and short-term issuer credit ratings on Euroclear Bank S.A./N.V. and our '##-/A-1+' ratings on Euroclear Investments S.A. - The stable outlook reflects our view that the Euroclear group will maintain a leading...

Research Update