SWITZERLAND. Moody’s Investors Service has upgraded Dufry’s credit rating to Ba3 from B1 and changed the outlook to ‘positive’ from ‘stable’. The move is an important signal of confidence in the retailer’s prospects and those of the wider air travel market.
According to Moody’s, the rating actions reflect “strong trading in 2022 and solid recovery in credit ratios, the completion of the first step of the credit-enhancing business combination with Autogrill as well as the prospects for sustainable revenue and earnings growth, with expectations of deleveraging”.
In the rating report from 27 April, Moody’s referred to Dufry’s results delivery ahead of both Moody’s forecasts and global air passenger volumes, with profitability closely tracking revenue recovery amid cost discipline. The report mentions the improved leverage level of Dufry (stand-alone), further supported by the low net debt at Autogrill and the conservative funding structure for the business combination.
Moody’s also commented on Dufry’s “headroom” around its covenant testing as well as highlighting its liquidity in concluding the Mandatory Tender Offer (MTO) while it also addressed the maturity of Dufry’s 2024 €800 million bond.
Dufry Group CFO Yves Gerster commented: “We appreciate the rating actions published by Moody’s following the upgrade already received by S&P Global Ratings in March. The improvements in rating and outlook by both agencies confirm our strong performance, positive expectations as well as solid financial position with more than CHF2.3 billion available liquidity and the lowest net debt level since 2015.
“As commented by Moody’s, we have sufficient liquidity for any financing requirements, which might come up during the MTO process as well as to address our 2024 maturities. The MTO progresses fully in accordance with the timeline laid out to the market, and we confirm the expected closing by the end of Q2 2023. We are pleased that the rating upgrades by both agencies improves our margin for borrowings under the RCF by 50bps.” ✈
