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CREDIT RATING: WeBuild (BB[P]/BB[P]): S&P Outlook Positive

CREDIT RATING
  • Brings S&P in line with Fitch.
  • Key metrics for an upgrade to BB+ are FFO/D reaching 35-40% and EBITDA margin at 8.5-9%. S&P expects the former to be reached in 2024/25 and 8-9% margins.
  • FOCF is volatile with large working capital swings; over the 2023-25 period S&P assumes it will be significantly positive leading to moderate debt reduction.
  • They expect EBITDA growth of 11% and 7% in 24 and 25, underpinned by a strong order book.
  • Webuild has derisked their contract structure to enable easier cost pass-through and decreased its footprint in high-risk countries.
  • Ratings are constrained by legacy exposure to high-risk markets and project concentration.
  • IPGIM 5.375 06/29 issued last month remain close to par.
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  • Brings S&P in line with Fitch.
  • Key metrics for an upgrade to BB+ are FFO/D reaching 35-40% and EBITDA margin at 8.5-9%. S&P expects the former to be reached in 2024/25 and 8-9% margins.
  • FOCF is volatile with large working capital swings; over the 2023-25 period S&P assumes it will be significantly positive leading to moderate debt reduction.
  • They expect EBITDA growth of 11% and 7% in 24 and 25, underpinned by a strong order book.
  • Webuild has derisked their contract structure to enable easier cost pass-through and decreased its footprint in high-risk countries.
  • Ratings are constrained by legacy exposure to high-risk markets and project concentration.
  • IPGIM 5.375 06/29 issued last month remain close to par.