Research Update: ams-OSRAM 'BB-' Rating Affirmed On Expected Rights Issue To Balance Weak Cash Flow Generation; Outlook Negative

Austria-based LED manufacturer ams-OSRAM AG has launched a re-financing plan to address the company's ongoing investments and upcoming maturities. The plan includes an €800 million rights issue and issuance of an €800 million unsecured bond. At the same time, we have lowered our revenue and EBITDA expectations and raised our capital expenditure expectations for 2024, leading to slightly positive S&P Global Ratings-adjusted free operating cash flow (FOCF) for the same year and leverage of about 3.3x at year-end 2024. We therefore affirmed our 'BB-' rating on ams-OSRAM AG and assigned our 'BB-' issue rating to the proposed unsecured bond. The negative outlook reflects our projection of weak FOCF over the next 12 months. We could downgrade ams if FOCF remained

...- Austria-based LED manufacturer ams-OSRAM AG has launched a re-financing plan to address the company's ongoing investments and upcoming maturities. The plan includes an 800 million rights issue and issuance of an 800 million unsecured bond. - At the same time, we have lowered our revenue and EBITDA expectations and raised our capital expenditure expectations for 2024, leading to slightly positive S&P Global Ratings-adjusted free operating cash flow (FOCF) for the same year and leverage of about 3.3x at year-end 2024. - We therefore affirmed our '##-' rating on ams-OSRAM AG and assigned our '##-' issue rating to the proposed unsecured bond. - The negative outlook reflects our projection of weak FOCF over the next 12 months. We could downgrade ams if FOCF remained negative over a longer period or leverage remained above 3.5x in 2024....

Research Update