Chinese consumer electronics manufacturer Lenovo Group issuer and senior unsecured ratings have been upgraded to Baa2 from Baa3 by Moody’s. The rating agency cited Lenovo’s improved credit profile from debt reduction initiatives and a higher EBITDA as reasons for the upgrade. Moody’s added, “We expect the company’s continued disciplined financial management will help it to maintain its excellent liquidity and improved debt leverage, which is strong for its rating category.” Lenovo was the largest PC maker in 2021 with a market share of 23.5%, up from 17.1% in 2013 when it first achieved the status of the world’s largest PC maker. Moody’s expects the company to earn revenues upwards of $70bn over the next 12-18 months with an EBITDA margin of 5.8-6.0% (vs. 6.0-6.2% expected in the fiscal ending March 2022). Its leverage for the 12 months ended December 2021 improved to 1.2x from 1.7x for the fiscal ended March 2021; Moody’s expects leverage to remain below 1.5x through the next 12-18 months.
Lenovo’s 3.421% 2030s traded 1 point higher to 96.75, yielding 3.87%.