Moody’s said: “The rating upgrade reflects Investor's conservative investment and leverage strategy, the improved quality, liquidity and stock prices of the company's core investments, and our expectation that management will keep its investment portfolio rather liquid with a high share of listed investments and a moderate leverage.”

Stable outlook

Moody’s also stated that the outlook for the ratings is now stable, supported by the quality and liquidity of the investment portfolio with transparent valuations and confidence in management's commitment and ability to keep leverage below 25%.

Moody’s view is supported by the actions taken during the market downturn in 2002 when assets disposals were executed at depressed prices in a severe stock market downturn.

“We are very pleased that Moody’s confirms our very strong credit profile by upgrading  Investor to A1. Given the current climate in the credit and equity markets, it illustrates the confidence in our business model and financial flexibility," says Investor CFO Johan Bygge. 

Fifth year of recovery

“Investor is in its fifth year of recovery of asset values resulting from a strong run-up in the stock prices of its core investments, particularly in Atlas Copco, Electrolux and SEB, which have raised their share prices more than twice from their 2002 low points. Rising market valuations of their equity investment have allowed management to realize holding gains and reduce net leverage of the company.  While management is not changing its strategic capital structure comfort zone of a 25% maximum net leverage, which it had actively protected by assets sales in the downcycle, the current asset composition and liquidity of its portfolio holdings still provide substantially increased asset coverage for debt and new financial flexibility,” wrote Moody’s.

Information updated 2007-11-14 10:25:59