S&P Global Ratings revised its outlook on Grainger Plc to positive from stable while affirming its BB long-term corporate rating on the company.
The positive outlook mirrors S&P Global Ratings' expectation that the company's EBITDA interest coverage ratio is likely to become more robust than anticipated on the back of a refinancing of higher-yielding debt or stronger cash flow generation from the private rented sector business.
The rating agency also expects Grainger's financial risk profile to further improve and be closer to that of its higher-rated peers that have EBITDA interest coverage of more than 3x.
S&P Global Ratings also cited the company's asset diversity, low level of development activities and the use of joint venture partnerships to spread the risk on more capital-intensive projects for the positive outlook.
The positive outlook also reflects the possibility of a rating upgrade in the next 12 to 24 months, S&P Global Ratings added.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.