Stock market today: S&P 500 falls as government shutdown, trade jitters persist
Investing.com -- Moody’s Ratings has affirmed the Baa1 long-term issuer rating of Mondi Plc, a UK-listed integrated packaging and paper company, while changing the outlook to negative from stable.
The rating agency also affirmed the (P)Baa1 rating for Mondi’s backed senior unsecured medium term note programme and the Baa1 rating for its €750 million backed senior unsecured medium term note due 2028 issued by Mondi Finance Europe GMBH.
Additionally, Moody’s affirmed the (P)Baa1 rating for Mondi’s backed senior unsecured medium term note programme, as well as the Baa1 rating for the €600 million note due 2026, the €500 million note due 2032, and the €600 million note due 2033, all issued by Mondi Finance plc.
The outlook revision reflects Mondi’s continued weak operating performance, highlighted by a disappointing Q3 trading update following weak results in the first half of 2025 and throughout 2024. The company’s credit metrics have deteriorated beyond previous rating thresholds, with Moody’s-adjusted gross debt/EBITDA approaching 3.0x compared to the 2.0x guidance, while retained cash flow to debt has fallen below 30%.
Mondi’s performance weakness stems from a prolonged industry downturn, consistent with Moody’s negative outlook for the paper and forest products sector. In its Q3 update, Mondi reported softness in both volumes and prices for packaging products, including a reversal of price increases implemented in the first half of 2025.
Despite these challenges, Mondi is nearing completion of a significant investment cycle, with capital expenditure expected to reduce substantially in 2026, potentially supporting gradual deleveraging and improved free cash flow generation.
The Baa1 rating is supported by Mondi’s diversified operations across products, geographies, and customer segments, along with strong market positions in key packaging and paper categories. The company benefits from a cost-efficient asset base concentrated in lower-cost emerging markets and high vertical integration ensuring reliable fiber supply and energy self-sufficiency.
Mondi maintains ample liquidity with over €150 million in cash as of June 30, 2025, and approximately €1 billion in credit facilities. Its next debt maturity is €600 million due in April 2026.
The outlook could return to stable if Mondi’s profitability improves to over 15% EBITDA margin, leverage reduces to below 2.0x, and retained cash flow to debt exceeds 30%.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.