Moody's Upgrades Vallourec's Rating to Ba1, Positive Outlook Continues

Moody's Ratings has upgraded Vallourec S.A.'s long-term corporate family rating (CFR) from Ba2 to Ba1. The probability of default rating (PDR) has also been raised from Ba2-PD to Ba1-PD, along with the rating of $820 million in secured senior unsecured bonds maturing in 2032. The outlook for Vallourec remains positive.

This rating upgrade is attributed to Vallourec's successful transition to higher-value products and a reduction of approximately €200 million in industrial fixed costs since 2022. The company has achieved its target of zero net debt and improved conservative credit metrics; the gross debt/EBITDA ratio is expected to decline from 1.7x at the end of 2023 to 1.4x by the end of 2024. Despite a roughly 20% decline in revenue to €4 billion, Vallourec increased its EBITDA margin from 14.9% to approximately 16.1%.