Fitch Rates GIE PSA Tresorerie 'BB'; Outlook Stable
OREANDA-NEWS. Fitch Ratings has assigned GIE PSA Tresorerie a Long-term Issuer Default Rating (IDR) of 'BB', in line with the entity's ultimate parent, Peugeot S.A. (PSA; BB/Stable). The Outlook on the Long-term IDR is Stable.
KEY RATING DRIVERS
GIE PSA Tresorerie is jointly owned by PSA and its subsidiaries Peugeot Citroen Automobiles S.A., Automobiles Peugeot S.A. and Automobiles Citroen S.A, all members of the GIE group. The entity acts as the group's cash pooling and treasury service provider, and is a guarantor to bonds issued by PSA under their EUR5bn EMTN programme. It does not carry out operating activities in its own right. Due to strong legal, operational and strategic ties the rating of GIE PSA Tresorerie is equalised with that of the parent, PSA.
The ratings are driven by that of PSA, the rating sensitivities of which are as follows:
Future developments that may, individually or collectively, lead to positive rating action include
-Larger scale and further diversification in sales, combined with a track record of:
-Automotive operating margins above 3% (2014: 0.2%, 2015E: 3.2%, 2016E: 2.9%)
-Free cash flow (FCF) margin above 1.5% (2014: 1.8%, 2015E: 1.8%, 2016E: 1.5%)
-Funds from operations (FFO) adjusted net leverage below 1x (2014: 1.6x, 2015E: 0.7x, 2016E: 0.1x)
-Cash flow from operations (CFO)/adjusted debt above 40% (2014: 28%, 2015E: 46%, 2016E: 53%)
Future developments that may, individually or collectively, lead to negative rating action include
-Automotive operating margins below 2%
-FCF margin below 1%
-FFO adjusted net leverage above 2x
-CFO/adjusted debt below 25%