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Investing.com -- S&P Global Ratings has revised its outlook for France-based investment holding company Wendel (EPA:MWDP) SE from negative to stable, following a reduction in the company’s debt. The agency has also affirmed Wendel’s ’BBB’ long-term issuer credit and issue ratings on its unsecured debt, as well as its ’A-2’ short-term issuer credit rating.
Wendel SE sold a 6.7% stake in Bureau Veritas SA (BV), equivalent to 30.4 million shares, through a forward sale, resulting in a total net cash consideration of €748 million. This transaction led to a reduction in Wendel’s loan-to-value (LTV) ratio to approximately 17%, down from nearly 23% in October 2024. This was when Wendel announced its plan to acquire U.S.-based private debt asset manager Monroe Capital (NASDAQ:MRCC) LLC for $1.13 billion, a deal expected to close in the first or second quarter of 2025.
The company’s revised outlook reflects S&P Global Ratings’ expectation that Wendel will maintain its LTV ratio comfortably below the 20% threshold over the next 12-18 months. The agency anticipates that Wendel will manage its capital allocation strategy, prioritizing some organic deleveraging during this period.
S&P Global Ratings views Wendel’s recent initiative to reduce its net debt position following the Monroe Capital acquisition announcement as a positive signal of its commitment to maintain a LTV ratio under the 20% maximum level for the rating. Wendel’s financial policy framework includes a commitment to maintain an investment-grade rating.
The acquisition of Monroe Capital is anticipated to bolster Wendel’s third-party asset management platform, with total pro forma assets under management (AUM) expected to be about €33 billion. Monroe Capital’s AUM has notably grown at a compound annual growth rate of about 30% since 2013, reaching $20.2 billion as of Dec. 31, 2024.
Recent acquisitions of principal investments in Scalian for €557 million and Globeducate for €607 million were funded by the €1.1 billion sale of Constantia Flexibles completed in January 2024. Furthermore, the two consecutive BV stake sales completed in March 2025 and April 2024 for total net proceeds of about €1.85 billion more than covered the initial investments for the acquisition of IK Partners and Monroe Capital.
Pro forma the forward sale transaction, Wendel reduced its concentration on BV to about 28% of its portfolio from 45% as of Dec. 31, 2023, and increased its exposure to the asset management industry.
S&P Global Ratings maintains that a potential positive rating action is unlikely over the next 12-18 months for Wendel. However, the agency would consider upgrading Wendel if its portfolio value and diversity increases in favor of listed assets such that the portfolio share of liquid assets is above 60% on a structural basis or if the average creditworthiness of its assets materially improves.
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