# IFF's Credit Rating Improved

Rating agency S&P Global has upgraded the credit rating of International Flavors & Fragrances (IFF). The decision is linked to the company's improved financial condition and debt reduction.

S&P raised IFF's long-term credit rating by one notch, while improving its short-term rating from A-3 to A-2. According to the agency's assessment, the company's financial metrics have strengthened in recent periods, particularly after IFF sold its Pharma Solutions business and managed to reduce its debt volume.

The company also plans to sell its food ingredients business. From this transaction, IFF expects to receive approximately $3.8 billion. Part of the proceeds will be used to pay down debt, while another portion will be allocated to share buybacks and business development.

According to S&P's forecast, the company's free cash flow will exceed $650 million annually, which will be sufficient for both dividend payments and reducing financial obligations. Despite sales growth being expected at only 1 percent this year, the agency assumes this figure will increase to 3-4 percent in the coming years. Additionally, EBITDA margin, one of the key operational profitability indicators, is expected to remain at approximately 20 percent over the next 12-18 months. S&P believes that a further rating upgrade in the near term is unlikely.

Source: Investing.com