Moody's upgrades PRISA's rating, citing "robust" operating performance over the past three years and the Group’s efforts to reduce debt

• The agency has lauded the improvement in governance in recent years and a "more conservative financial policy than in the past".
• The rating firm believes that PRISA "will continue to show solid operating performance over the next 12 to 18 months".

International rating agency Moody's has upgraded PRISA's score to B3 with stable outlook from Caa1 with stable outlook. "This rating upgrade reflects stronger credit metrics, supported by improved operating performance over the past three years and the company's efforts to reduce its debt burden, including the issuance of mandatory convertible notes," says Víctor García Capdevila, Moody's vice president and senior analyst for PRISA.

The agency said that "the B3 rating reflects the company's robust operating and financial performance over the past three years and a considerable improvement in its key credit metrics".

Moody's reports that PRISA generated revenues of 947 million euros in 2023, up 11% year-on-year. This was driven by 15% growth in the education business, which reached 515 million euros, and 7% growth in the media business, for a total of 432 million euros.

The agency highlighted that "corporate governance proved key to the upgrade, with PRISA's financial policy now more conservative than in the past. The company continues to demonstrate its commitment to reducing debt levels".

Moody’s notes that: “In February 2023, PRISA issued convertible notes valued at 130 million euros to amortize part of the junior tranche of its syndicated debt. In January 2024, the company announced the issuance of up to further 100 million euros in convertible notes aimed at paying off the remaining junior tranche of 87 million euros of syndicated loans. This has prompted the change in how we scored the company's financial strategy and risk management."

Moody's maintains that "the B3 rating reflects PRISA's strong lead in the media market and the resilience of the education business in Latin America [where

Santillana is market leader], which is reinforced by the growing contribution of subscription models based on digital-learning systems".

The agency graded the company's liquidity as adequate, maintaining this outlook under the assumption that "the company will continue to show solid operating performance over the next 12 to 18 months".