trending Market Intelligence /marketintelligence/en/news-insights/trending/1xkuvcisvo1vo05pff-5aq2 content esgSubNav
In This List

Moody's upgrades Stora Enso on sustained credit metrics improvement

Case Study

A European Bank Leverages an AIF Scorecard to Help Meet Basel Regulatory Requirements

Podcast

Private Markets 360 | Episode 6: Benchmarking private investment performance

Case Study

Powering the markets of the future with data and AI

Blog

Analyzing Sentiment in Quarterly Earnings Calls — Q3 2023


Moody's upgrades Stora Enso on sustained credit metrics improvement

Moody's upgraded Stora Enso Oyj's corporate family rating to Ba1 from Ba2 and the paper products manufacturer's probability of default rating to Ba1-PD from Ba2-PD with a positive outlook.

The positive outlook is based on "an increasing likelihood that over the next 18 months the company will reach credit metrics sustainably commensurate with an investment grade rating," said Martin Fujerik, Moody's lead analyst on the company.

Moody's said Stora Enso's business profile and balance sheet have strengthened further in 2017 and the company continues to diversify its business beyond the traditional graphic grade paper.

Stora Enso has invested significant amounts in higher growth businesses, such as paper packaging, in the past couple of years. These businesses now represent more than 80% of the company's operating income, compared to around one-third of operating income in 2006, the rating agency said.

This shift in Stora Enso's business mix has resulted in a sustained improvement in credit metrics due to its structurally higher profitability than the paper operations, it said.

Moody's said the company may tighten its net leverage ceiling, which would increase the likelihood that management would be willing to maintain investment grade credit metrics. The rating agency expects good pricing for a number of end products to support solid organic growth in 2018.