ASTALDI - RATING REPORT
RATING RATIONALE
- We have downgraded our corporate credit rating on Astaldi S.p.A. (Astaldi) to CCC+ from B over our concern about Astaldi’s financial profile fully dependent on its ability to execute its €200m capital increase announced last November and also to realize asset disposals.
- Over the last year, Astaldi’s leverage ratios have remained broadly the same. Net leverage calculated by the company and our calculation of adjusted net leverage have been stable (3.7x at 3Q17 vs. 3.5x at 3Q16 for net leverage and 6.8x vs. 6.9x for adjusted net leverage). However, free cashflow over the first nine months of the year has deteriorated to -€341m compared to -€272m last year. The typical seasonal decrease in working capital remains our assumption for the last quarter of the year. Nevertheless, we forecast the Italian company to report another year of negative free cashflow as it has difficulties controlling its working capital.
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Spread Research is France's first Rating Agency, registered by ESMA (European Securities and Markets Authority) and a leading European Independent Credit Research firm, founded in 2004 and based in Lyon, France. Our experienced team offer key research services using a wide range of investment strategies and research methodologies for the High Yield, Emerging Markets, Convertibles and Loan Markets.
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