Research Update: German Car Parts Supplier ZF Friedrichshafen Long-Term Rating Raised To 'BBB-'; Outlook Stable

German automotive component supplier ZF Friedrichshafen (ZF) strengthened its financial risk profile in 2017 and we expect it will reduce its leverage further in 2018 through strong generation of free cash flows and some disposal proceeds. We are therefore raising our long-term issuer credit rating on ZF and our issue ratings on its senior unsecured debt to 'BBB-' from 'BB+'. The stable outlook reflects our expectation that ZF will be able to maintain solid EBITDA margins of 10%-11% and will continue to reduce leverage in 2018-2019. On March 22, 2018, S&P Global Ratings raised to 'BBB-' from 'BB+' its long-term issuer credit rating on Germany-based automotive component supplier ZF Friedrichshafen AG (ZF). The outlook is stable. At the same time,

...+ German automotive component supplier ZF Friedrichshafen (ZF) strengthened its financial risk profile in 2017 and we expect it will reduce its leverage further in 2018 through strong generation of free cash flows and some disposal proceeds. + We are therefore raising our long-term issuer credit rating on ZF and our issue ratings on its senior unsecured debt to '###-' from '##+'. + The stable outlook reflects our expectation that ZF will be able to maintain solid EBITDA margins of 10%-11% and will continue to reduce leverage in 2018-2019....

Research Update