U.S. markets closed
  • S&P 500

    4,071.70
    -4.87 (-0.12%)
     
  • Dow 30

    34,429.88
    +34.87 (+0.10%)
     
  • Nasdaq

    11,461.50
    -20.95 (-0.18%)
     
  • Russell 2000

    1,892.84
    +11.16 (+0.59%)
     
  • Crude Oil

    80.34
    -0.88 (-1.08%)
     
  • Gold

    1,797.30
    -3.80 (-0.21%)
     
  • Silver

    23.17
    +0.53 (+2.33%)
     
  • EUR/USD

    1.0531
    +0.0002 (+0.02%)
     
  • 10-Yr Bond

    3.5060
    -0.0230 (-0.65%)
     
  • GBP/USD

    1.2296
    +0.0040 (+0.33%)
     
  • USD/JPY

    134.2710
    -1.0350 (-0.76%)
     
  • BTC-USD

    17,068.59
    +109.71 (+0.65%)
     
  • CMC Crypto 200

    404.33
    +2.91 (+0.72%)
     
  • FTSE 100

    7,556.23
    -2.26 (-0.03%)
     
  • Nikkei 225

    27,777.90
    -448.18 (-1.59%)
     

Franz Haniel & Cie. GmbH -- Moody's affirms Haniel's Baa3 rating; outlook stable

Rating Action: Moody's affirms Haniel's Baa3 rating; outlook stableGlobal Credit Research - 06 Sep 2022Frankfurt am Main, September 06, 2022 -- Moody's Investors Service ("Moody's") affirmed the Baa3 long-term issuer rating of Franz Haniel & Cie. GmbH (Haniel or the company). The outlook remains stable.RATINGS RATIONALEThe affirmation of Haniel's Baa3 rating reflects the company's track record of conservative financial policies, maintenance of low market value leverage (MVL) and strong interest cover, which Moody's expects to continue throughout a range of economic cycles. Moody's expects to generate mid to high single digit total shareholder returns (including a dividend yield of 1%-2%) to its shareholders, comprised of over 750 members of the Haniel family while also sustaining metrics in line with expectations for its Baa3 rating.Haniel's relatively defensive portfolio of investments, with a good mix between cyclical and non-cyclical sectors and early and late cycle investments, as well as the generally modest leverage at the investee level underpins Haniel's conservative stance towards financial leverage and further supports the Baa3 rating.With a market value leverage of below 20% since 2018 and portfolio value growth averaging around 6% over the same period, Haniel has demonstrated its ability to generate growth whilst maintaining a conservative balance sheet structure. Net MVL deteriorated moderately during H1 2022, rising to 16.5% as of 30 June 2022 from 11.3% in 2021, as equity valuation fell in an environment of increased geopolitical and macroeconomic risks along with persisting inflationary pressure and tighter monetary policies. Management commitment to an absolute net debt level of around €1 billion ensures that Haniel does not increase leverage against rising valuation multiples, and Moody's expects Haniel to act swiftly and decisively if its net MVL is sustainably above 20% as a result of a market downturn.A portfolio with higher asset concentration, less liquidity and lower transparency relative to rated peers constrain the rating. Haniel's anchor investment CWS accounts for more than half of its portfolio value and the three most valuable investments for about two thirds. Following the divestiture of a 12.5% stake in Metro AG since 2018, Haniel has redeployed these divestiture proceeds towards acquisitions of private assets. As a result of the shift towards private assets, investment portfolio transparency declined from 44% in 2017 to 17% as of June 2022. The private assets are inherently less liquid, which reduce alternate liquidity options. Moody's expects Haniel to reinvest more cautiously as the global growth outlook continues to weaken, particularly as financial conditions have tightened.RATIONALE FOR STABLE OUTLOOKThe stable outlook reflects Moody's expectation that Haniel maintains conservative financial policies, a net MVL ratio below 20% and interest cover above 2.0x.LIQUIDITYAs of June 2022, Haniel had €4 million of cash in addition to highly liquid financial investments (including intercompany loans) of around €850 million. Haniel also has ongoing access to around €376 million of undrawn committed revolving credit facilities of a total amount of €725 million of committed revolving credit facilities. Around €180 million of debt matures in H2 2022, which Haniel can cover with its committed revolving credit facilities. Moody's expects debt maturities in 2022 and beyond, if not repaid by cash or from available revolving credit facilities, to be refinanced well in advance.ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONSThe Baa3 rating takes into account the conservative nature of the shareholder family, a consideration in the context of Moody's governance framework. Shareholder return is used to incentivize the group's management board and is an important objective for the Haniel family, but Moody's believes that capital preservation is paramount to the family's objective. Capital preservation implies a conservative approach to leverage at both the parent company and investment level, which supports credit quality and the rating.FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGMoody's could upgrade the ratings if Haniel's investment portfolio strengthened in terms of size and value, sector, geographic and asset diversification. The rating could also be upgraded if net MVL drops below 15% on a sustained basis and interest cover is substantially and sustainably above 4.0x.Moody's could downgrade the ratings with expectations for net MVL above 20% or interest cover below 2.0x, both on a sustained basis. The rating could also be downgraded if Haniel's financial policy were to become less conservative.PRINCIPAL METHODOLOGYThe principal methodology used in this rating was Investment Holding Companies and Conglomerates published in July 2018 and available at https://ratings.moodys.com/api/rmc-documents/56472. Alternatively, please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.COMPANY PROFILEFranz Haniel & Cie. GmbH (Haniel) is one of the oldest companies in Germany. The company is privately owned by more than 750 members of the Haniel family. As of December 2021, it had investments in ten businesses, including investees such as CWS, TAKKT AG, CECONOMY AG (CECONOMY, Ba1 stable) and METRO AG.REGULATORY DISCLOSURESFor further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found on https://ratings.moodys.com/rating-definitions.For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the issuer/deal page for the respective issuer on https://ratings.moodys.com.For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.The rating has been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.The rating is solicited. Please refer to Moody's Policy for Designating and Assigning Unsolicited Credit Ratings available on its website https://ratings.moodys.com.Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://ratings.moodys.com/documents/PBC_1288235.At least one ESG consideration was material to the credit rating action (s) announced and described above.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the UK and is endorsed by Moody's Investors Service Limited, One Canada Square, Canary Wharf, London E14 5FA under the law applicable to credit rating agencies in the UK. Further information on the UK endorsement status and on the Moody's office that issued the credit rating is available on https://ratings.moodys.com.Please see https://ratings.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.Please see the issuer/deal page on https://ratings.moodys.com for additional regulatory disclosures for each credit rating. Martin Kohlhase VP - Senior Credit Officer Corporate Finance Group Moody's Deutschland GmbH An der Welle 5 Frankfurt am Main, 60322 Germany JOURNALISTS: 44 20 7772 5456 Client Service: 44 20 7772 5454 Karen Berckmann, CFA Associate Managing Director Corporate Finance Group JOURNALISTS: 44 20 7772 5456 Client Service: 44 20 7772 5454 Releasing Office: Moody's Deutschland GmbH An der Welle 5 Frankfurt am Main, 60322 Germany JOURNALISTS: 44 20 7772 5456 Client Service: 44 20 7772 5454 © 2022 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.CREDIT RATINGS ISSUED BY MOODY'S CREDIT RATINGS AFFILIATES ARE THEIR CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY’S (COLLECTIVELY, “PUBLICATIONS”) MAY INCLUDE SUCH CURRENT OPINIONS. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE APPLICABLE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S CREDIT RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS (“ASSESSMENTS”), AND OTHER OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. AND/OR ITS AFFILIATES. MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS, ASSESSMENTS AND OTHER OPINIONS AND PUBLISHES ITS PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing its Publications.To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING, ASSESSMENT, OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any credit rating, agreed to pay to Moody’s Investors Service, Inc. for credit ratings opinions and services rendered by it fees ranging from $1,000 to approximately $5,000,000. MCO and Moody’s Investors Service also maintain policies and procedures to address the independence of Moody’s Investors Service credit ratings and credit rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold credit ratings from Moody’s Investors Service and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any credit rating, agreed to pay to MJKK or MSFJ (as applicable) for credit ratings opinions and services rendered by it fees ranging from JPY100,000 to approximately JPY550,000,000.MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements. ​