15th Oct 2021 21:19
(Alliance News) - Moody's Investors Service on Friday lifted its rating for Tui AG, citing a rosier outlook for the travel sector.
Moody's lifted the tour operator's corporate family rating to B3 from Caa1. The outlook remains stable.
"Our decision to upgrade Tui's rating reflects both the improving market outlook for leisure travel as the majority of Europeans are already vaccinated as well as the progress the company has achieved in safeguarding liquidity, strengthening the balance sheet with additional equity and raising funds that will allow it to start paying back support packages Tui has received during the Covid crisis," Vitali Morgovski, Moody's lead analyst for Tui said.
"The upgrade is based on the expectation that credit metrics and free cash flow generation will be improved to levels in line with the requirements for the B3 rating category over the next quarters, driven by the anticipated normalization of operations."
Moody's expects Tui's earnings to remain subject to virus pressure for now, though it expects things in that respect to become "positive in 2022".
Tui shares closed 1.5% lower at 262.30 pence each in London on Friday.
By Eric Cunha; [email protected]
Copyright 2021 Alliance News Limited. All Rights Reserved.
Related Shares:
TUI.L