20 October 2021

TUI’s rating upgraded

The rating agencies Moody's and S&P have raised their ratings for TUI's creditworthiness. Moody's raised its Corporate Family Rating (CFR) to B3 from Caa1. The outlook remains stable. S&P Global Ratings also raised TUI's rating by one notch to B-. The agencies said the reason for the decision was that the market outlook for holiday travel has improved and is leading to rising bookings. In addition to the progress made with vaccinations in Europe, the steps taken and implemented at the Group also had an impact: TUI had secured liquidity and strengthened its balance sheet with additional equity, among other things. The recent capital increase was viewed positively as TUI can start to repay the Covid-19 support packages.
The group had announced that the proceeds from the capital increase of around 1.1 billion euros would be used to reduce the use of the credit facility (RCF) from KfW and the private banks. With the upgrade, Moody's Investors Service assumes that the credit ratios and free cash flow will improve in the coming quarters to a level that meets the requirements for the B3 rating category. S&P assumes that the Group can maintain adequate liquidity and is able to reduce debt.