Fitch Ratings has raised the Long-Term Issuer Default Ratings for TechnipFMC plc and FMC Technologies, Inc. to BBB from BBB-. The upgrade also applies to the company’s senior unsecured revolver and unsecured notes, which were moved to BBB from BBB-. Fitch left the Rating Outlook at Stable.
In its rating actions, Fitch assigned TechnipFMC plc an F2 Short-Term Issuer Default Rating and an F2 rating to the company’s $1.0 billion commercial paper program, which is issued through the company’s wholly owned financing subsidiary, TechnipFMC Finance plc. The commercial paper program is guaranteed by FMC Technologies, Inc., and Fitch noted that any outstanding commercial paper reduces revolver availability for FMC Technologies, Inc.
The agency highlighted several credit positives underpinning the upgrade: a significant reduction in gross debt, leverage that sits below 0.5x on an EBITDA basis, strong free cash flow generation and an improving backlog. TechnipFMC has reduced gross debt by approximately $650 million since year-end 2023 and reported $420 million of debt outstanding as of the first quarter of 2026. The company also finished the first quarter of 2026 with a subsea backlog of $15.8 billion.
Fitch forecasts that EBITDA leverage will remain below 0.5x across the rating horizon, a projection it said is supported by continued EBITDA growth, margin expansion and management’s conservative financial policies. The rating agency projects total EBITDA of over $2.0 billion for fiscal year 2026.
On liquidity, TechnipFMC held $961 million of cash at the end of the first quarter of 2026 and reported full availability under its $1.25 billion revolver. Fitch also set out free cash flow expectations, forecasting annual free cash flow of approximately $1.3 billion to $1.5 billion in both 2026 and 2027.
The company has stated its intention to return more than 70% of annual free cash flow to shareholders via dividends and share repurchases. Fitch additionally withdrew FMC Technologies, Inc.’s BBB Issuer Default Rating on the basis that the entity is not expected to issue debt going forward.
Balance-sheet and cash-flow perspective
From a balance-sheet standpoint, the upgrade reflects a material decline in gross debt and sustained cash generation. The combination of roughly $650 million in gross debt reduction since the end of 2023, only $420 million of debt on the books as of Q1 2026 and nearly $1.0 billion in cash provides the company with flexibility around liquidity and capital allocation.
Fitch’s forecasted EBITDA of more than $2.0 billion for fiscal 2026 and projected free cash flow of roughly $1.3 billion to $1.5 billion in both 2026 and 2027 underpin the agency’s view that leverage should remain under 0.5x, assuming continued margin improvement and conservative financial policies by management.
What this means for markets and stakeholders
- Credit markets - The upgrade to BBB and the F2 short-term ratings improve the company’s standing with fixed-income investors and may lower funding costs relative to the prior rating.
- Equity holders - The company’s stated plan to return more than 70% of free cash flow to shareholders through dividends and buybacks is now framed by a stronger-rated balance sheet and healthy projected free cash flow.
- Subsea and project counterparties - A $15.8 billion subsea backlog as of Q1 2026 signals material near-term revenue visibility that supports the credit profile.
Note: This article reports Fitch’s rating actions and the company figures as stated by Fitch and TechnipFMC. It does not introduce new forecasts or figures beyond those contained in the ratings communication.