Stock Markets June 25, 2026 03:55 PM

Moody's Bumps Amer Sports' Revolver Rating After Debt Paydown

Rating agency cites equity-funded repayment and stronger recovery prospects as secured revolver moves to investment-grade level

By Nina Shah
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Moody's upgraded the senior secured revolving credit facility for Amer Sports Corporation to Baa3 from Ba1 while keeping the company's Ba1 corporate family rating and Ba1-PD probability of default unchanged. The action follows a substantial debt repayment funded by equity proceeds and a reduction in secured debt, which lowered Moody's-adjusted debt/EBITDA to 0.9x as of March 31, 2026. Liquidity is characterized as very good, supported by cash, free cash flow and access to a $710 million undrawn revolver.

Moody's Bumps Amer Sports' Revolver Rating After Debt Paydown
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Key Points

  • Moody's upgraded Amer Sports' senior secured revolver to Baa3 from Ba1 while affirming the Ba1 corporate family rating and Ba1-PD for the parent; speculative grade liquidity rating remains SGL-1 with stable outlooks.
  • Moody's-adjusted debt/EBITDA fell to 0.9x as of March 31, 2026 following repayment of 2026 secured notes funded by equity issuance proceeds; pro forma EBITA/interest is 20x.
  • Projected high-teen to low-20 percent revenue growth and modest EBITDA margin expansion over the next 12-18 months; liquidity supported by cash, solid free cash flow and a $710 million undrawn revolver.

Moody's Investors Service raised the rating on Amer Sports Corporation's senior secured revolving credit facility to Baa3 from Ba1, reflecting a material reduction in secured borrowings and improved recovery prospects for the revolver. At the same time, Moody's affirmed Amer Sports, Inc.'s corporate family rating at Ba1 and the Ba1-PD probability of default rating for the parent company. Both entities retain stable outlooks, and the speculative grade liquidity rating remains SGL-1.

The upgrade was driven by the company's sizable repayment of secured indebtedness, which Moody's said was funded with proceeds from an equity issuance. That deleveraging reshaped the capital structure and improved the likely recovery for the secured revolver in a stress scenario.

On a Moody's-adjusted basis, debt/EBITDA fell to 0.9x as of March 31, 2026, after the repayment of the 2026 secured notes. Moody's indicated that this ratio places the company's secured revolver comfortably within the financial parameters consistent with the Ba1 category, supporting the promotion of the facility to Baa3.

Moody's maintained Amer Sports' Ba1 corporate family rating on the strength of the company's positions in premium outdoor apparel, trail footwear and sports equipment segments. The analysis highlights Arc'teryx and Salomon as the primary profit engines - each brand generates more than $2 billion in revenue and together account for the bulk of operating profit. Wilson and a portfolio of smaller sports equipment brands contribute additional revenue and product diversification.

On a pro forma basis, Moody's-adjusted EBITA to interest expense was reported at 20x. The rating agency projects top-line expansion in the high-teen to low-20 percent range and expects a modest improvement in EBITDA margin over the next 12-18 months. Under Moody's baseline, adjusted debt/EBITDA should remain around the 1x area during that period, provided the company does not take on new debt other than through an increase in operating leases.

Liquidity characteristics were described as very good. Moody's pointed to the company's cash balances, solid free cash flow generation and the availability of a $710 million undrawn revolving credit facility as supporting factors for near-term liquidity needs.

Ownership concentration is notable: ANTA Sports Products Limited holds roughly 40% of Amer Sports' outstanding shares, while other pre-IPO shareholders together control about 30%. As long as ANTA's stake stays above 30%, it has the right to nominate five directors to the company's board. Moody's noted that Amer Sports currently operates well below its public net leverage target of 1.5x or less, and it expects leverage to remain below 2x over the intermediate term.


Analyst note: The rating action centers on capital structure improvement via equity-funded debt reduction, attendant enhancement to recovery prospects for secured creditors, and continued operational strength from key premium brands. Liquidity and leverage metrics remain central to Moody's forward view.

Risks

  • Moody's projections and the expectation that adjusted debt/EBITDA will remain near 1x assume no new debt incurrence other than increased operating leases - deviation from this assumption could affect leverage metrics and ratings.
  • Concentrated ownership by ANTA Sports Products Limited - holding roughly 40% of shares and with the right to nominate five directors while above a 30% stake - presents governance and shareholder-concentration considerations.
  • Leverage may remain below 2x over the intermediate term according to Moody's, but sustaining that profile depends on cash flow performance and the company's restraint on incremental debt beyond operating leases.

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