SUSE S.A. Upgraded To 'BB-' On Partial Debt Repayment, Better Financial Policy; Outlook Stable - S&P Global Ratings’ Credit Research

SUSE S.A. Upgraded To 'BB-' On Partial Debt Repayment, Better Financial Policy; Outlook Stable

SUSE S.A. Upgraded To 'BB-' On Partial Debt Repayment, Better Financial Policy; Outlook Stable - S&P Global Ratings’ Credit Research
SUSE S.A. Upgraded To 'BB-' On Partial Debt Repayment, Better Financial Policy; Outlook Stable
Published Jun 15, 2021
3 pages (1726 words) — Published Jun 15, 2021
Price US$ 150.00  |  Buy this Report Now

About This Report

  
Abstract:

SUSE Linux repaid about $500 million of its total $1.3 billion first- and second-lien term loans shortly after its $5 billion IPO in May 2021. We expect the sizable debt reduction and strong EBITDA growth will decrease SUSE Linux's adjusted leverage to about 5.0x in 2021 (4.2x excluding exceptional costs) compared with our previous forecast of 7.5x in 2021, and 6.5x in 2020. We expect strong cash flow metrics, with free operating cash flow (FOCF) to debt sustainably higher than 15%. Furthermore, we expect SUSE Linux will pursue a more prudent financial policy in the long term, given its target of leverage below 3.5x (company-adjusted, considering the net debt to cash EBITDA ratio) compared with 5.6x in January 2021. We

  
Brief Excerpt:

...June 15, 2021 - SUSE Linux repaid about $500 million of its total $1.3 billion first- and second-lien term loans shortly after its $5 billion IPO in May 2021. - We expect the sizable debt reduction and strong EBITDA growth will decrease SUSE Linux's adjusted leverage to about 5.0x in 2021 (4.2x excluding exceptional costs) compared with our previous forecast of 7.5x in 2021, and 6.5x in 2020. - We expect strong cash flow metrics, with free operating cash flow (FOCF) to debt sustainably higher than 15%. - Furthermore, we expect SUSE Linux will pursue a more prudent financial policy in the long term, given its target of leverage below 3.5x (company-adjusted, considering the net debt to cash EBITDA ratio) compared with 5.6x in January 2021. - We have therefore raised our issuer credit rating on SUSE S.A., the intermediate holding company of SUSE Linux, to '##-' from 'B'. - We also raised the issue rating on SUSE S.A.'s debt to '##-' from 'B', maintained the recovery rating at '3', and revised...

  
Report Type:

Ratings Action

Issuer
SUSE S.A.
GICS
Systems Software (45103020)
Sector
Global Issuers
Country
Luxembourg
Region
Europe, Middle East, Africa
Format:
PDF Adobe Acrobat
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MLA:
S&P Global Ratings’ Credit Research. "SUSE S.A. Upgraded To 'BB-' On Partial Debt Repayment, Better Financial Policy; Outlook Stable" Jun 15, 2021. Alacra Store. May 23, 2025. <http://www.alacrastore.com/s-and-p-credit-research/SUSE-S-A-Upgraded-To-BB-On-Partial-Debt-Repayment-Better-Financial-Policy-Outlook-Stable-2666654>
  
APA:
S&P Global Ratings’ Credit Research. (). SUSE S.A. Upgraded To 'BB-' On Partial Debt Repayment, Better Financial Policy; Outlook Stable Jun 15, 2021. New York, NY: Alacra Store. Retrieved May 23, 2025 from <http://www.alacrastore.com/s-and-p-credit-research/SUSE-S-A-Upgraded-To-BB-On-Partial-Debt-Repayment-Better-Financial-Policy-Outlook-Stable-2666654>
  
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