KME - comment

We agree with much of what Fitch had to say about KME in its ratings change for the SSNs. Whilst the repayment of €190m of the €300m bond was positive for bondholders, there are still liquidity risks. The remaining €110m bond matures in February 2023 and the borrowing base and factoring facilities mature in 2022. KME will have to convince lenders and/or investors that its working capital requirements are financeable from a mixture of factoring, borrowing and increased tolling. We saw some progress in Q421 but the evidence isn’t compelling yet.

Fitch Affirms KME at 'B-'; Upgrades Senior Secured Rating (fitchratings.com)