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Credit ratings

A regular assessment by S&P and Moody's

Air Liquide’s credit ratings are based upon its credit worthiness and its ability to repay its debt. The Group is regularly assessed by the credit rating agencies Standard & Poor’s and Moody’s.

Air Liquide’s credit ratings

Agencies Analyst Short-term
rating
Long-term
rating
Outlook
S&P Gaetan Michel A-2
July 7, 2017
A-
July 7, 2017
Stable
July 7, 2017
Moody's Stanislas Duquesnoy P2
May 19, 2017
A3
May 19, 2017
Stable
May 19, 2017


Following the announcement of Airgas acquisition, finalized on May 23, 2016, both Credit Rating Agencies downgraded the Group’s Ratings by two notches.

Standard & Poor's

S&P long term credit ratings history:

Standard & Poor’s

Rationales behind S&P A- rating are excellent Business Risk as well as adequate Liquidity and a significant Financial Risk. S&P puts a strong focus on Air Liquide‘s earnings resilience and stable cash flow generation when analyzing the company's profitability and financial metrics. S&P views Air Liquide's profitability as less volatile than that of most specialty chemical companies.

The stable outlook reflects S&P's expectation that the company will report overall resilient performance and positive free operating cash flow generation, leading to adjusted FFO to debt of about 25% in the next three years.

The agency rates corporate issuers as follows:

  • Long-term ratings, in decreasing order: AAA (best), AA, A, BBB, BB, B, CCC, CC, C, D, SD (Selectively Defaulted). The rating is completed by + or -. Companies with ratings above BB+ are considered investment grade and those below non investment grade
  • Short-term ratings, in decreasing order: A-1+ (best), A-1, A-2, A-3, B, C, D

Moody's

Moody’s long term credit ratings history:

Moody’s

Moody’s rated Air Liquide’s long-term credit for the first time on May 24, 2016.

Rationales behind Moody’s A3 rating are stable and predictable cash flow generation supported by high barriers to entry, the low exposure to cyclical end-markets, ongoing efficiency gains and the ability to pass on most of increased input costs to Large Industries and Bulk customers through price escalation clauses.

Combined credit metrics have weakened as a result of the closing of the Airgas acquisition, but is expected to improve gradually to get back to levels more commensurate with the A3 rating by 2018. The rating also acknowledges the strong strategic rationale of the acquisition as it will increase Air Liquide's density in the US market, a key success factor in this industry.

The agency rates corporate issuers as follows:

  • Long-term ratings, in decreasing order: Aaa (best), Aa, A, Baa, Ba, B, Caa, Ca, C (Selectively Defaulted). The rating is completed by an 1 (best in the category), 2 or 3. Companies with ratings above Ba1 are considered investment grade and those below non investment grade
  • Short-term ratings, in decreasing order: P-1 (best), P-2, P-3, Not Prime