Research Update: Finland-Based Food Packaging Company Huhtamäki Oyj Assigned 'BB+' Rating; Outlook Stable

Huhtamäki Oyj recently acquired Turkey-based sustainable flexible packaging supplier, Elif Holding AS, which it financed with a $500 million multi-currency bridge loan. Despite a spike in S&P Global Ratings-adjusted debt to EBITDA to 3.5x to facilitate the acquisition, we expect management will maintain its prudent financial policy of reported net debt to EBITDA of 2.0x-3.0x in the long term, while continuing to focus on growing the business both organically and through acquisitions. We assigned our 'BB+' long-term issuer credit rating to Huhtamäki. The stable outlook reflects our view that Huhtamäki Oyj will experience further growth and stable demand, together with debt to EBITDA of about 3.0x and funds from operations (FFO) to debt of 25%-27% over the next 12 months.

...- HuhtamSki Oyj recently acquired Turkey-based sustainable flexible packaging supplier, Elif Holding AS, which it financed with a $500 million multi-currency bridge loan. - Despite a spike in S&P Global Ratings-adjusted debt to EBITDA to 3.5x to facilitate the acquisition, we expect management will maintain its prudent financial policy of reported net debt to EBITDA of 2.0x-3.0x in the long term, while continuing to focus on growing the business both organically and through acquisitions. - We assigned our '##+' long-term issuer credit rating to HuhtamSki. - The stable outlook reflects our view that HuhtamSki Oyj will experience further growth and stable demand, together with debt to EBITDA of about 3.0x and funds from operations (FFO) to debt of 25%-27% over the next 12 months....

Research Update