Fitch Ratings has upgraded Embraer’s rating from BB+ to BBB-. According to the agency, improving production, delivery profile and the profitability of the business, combined with gross debt reduction, are driving credit metrics to levels more commensurate with the higher rating. The rating outlook is stable.
In addition, Fitch detailed that Embraer's rating reflect its competitive positions in the commercial and business jet markets; backlog of $21.1 billion; and product portfolio diversification that includes defence programs and solid operations in its services and support segment. Embraer's robust liquidity (mostly held outside Brazil), large export revenue, and some offshore operating cash flow further support its rating.
"Embraer has an excellent product portfolio, updated to the market needs, and our focus on operational efficiency and financial discipline ensures sustainable business growth, profitability, and cash generation," said Embraer CFO Antonio Carlos. "This recognition from Fitch clearly demonstrates the success of our strategy and years of hard work."
This is the second investment grade status secured by Embraer, following the upgrade by S&P in February.