Research Update: Ventia Pty Ltd. Ratings Lowered To 'BB' On Higher Financial Risk Appetite; Outlook Stable

We believe there has been a step-change in Ventia Pty Ltd.'s financial risk appetite, as indicated by significantly weaker credit metrics of adjusted debt to EBITDA increasing to about 4.8x in the year ending Dec. 31, 2019, compared with below 4x since the company was established in fiscal 2015. Furthermore, we expect Ventia's leverage to remain elevated at about 5x in 2020 due to the debt-funded acquisition of Broadspectrum Pty Ltd., which is pending regulatory approval. As a result, we have revised our assessment of the company's financial risk profile to reflect the increased financial risk appetite. On April 8, 2020, S&P Global Ratings lowered its issuer credit rating on Ventia to 'BB' from 'BB+', and lowered its related issue

...- We believe there has been a step-change in Ventia Pty Ltd.'s financial risk appetite, as indicated by significantly weaker credit metrics of adjusted debt to EBITDA increasing to about 4.8x in the year ending Dec. 31, 2019, compared with below 4x since the company was established in fiscal 2015. - Furthermore, we expect Ventia's leverage to remain elevated at about 5x in 2020 due to the debt-funded acquisition of Broadspectrum Pty Ltd., which is pending regulatory approval. As a result, we have revised our assessment of the company's financial risk profile to reflect the increased financial risk appetite. - On April 8, 2020, S&P Global Ratings lowered its issuer credit rating on Ventia to '##' from '##+', and lowered its related issue ratings on the company's debt to '##' from '##+'. Recovery ratings on the debt remain unchanged at '4'. - The stable outlook reflects our expectation that the company will successfully integrate its Broadspectrum acquisition and operate with adjusted debt...

Research Update