Moody’s upgrades Cushman & Wakefield rating to Ba3 on debt reduction

Investing.com -- Moody’s Ratings upgraded the corporate family rating of Cushman & Wakefield plc (NYSE: CWK) U.S. Borrower, LLC to Ba3 from B1, citing steady operational momentum and a commitment to balance sheet repair. The rating agency also raised the commercial real estate firm's probability of default rating to Ba3-PD while elevating its senior secured term loans, revolving credit facility, and senior secured notes to Ba2.

Central to the upgraded profile is the company’s strong market position within global commercial real estate services, supported by a substantial proportion of earnings generated from multi-year facility and project management contracts. These multi-year arrangements entail significant client switching costs, providing high customer retention rates and a durable baseline of recurring income that helps offset the cyclical volatility of transaction-based leasing and capital markets divisions.

Liquidity remains a standout feature of Cushman & Wakefield’s credit profile, underscored by the retention of a top-tier SGL-1 speculative grade liquidity rating. The firm is anticipated to maintain a cash buffer of at least $500 million, generate upwards of $225 million in annual free cash flow, and keep its $1 billion revolving credit facility fully undrawn through its October 2030 expiration.

Against that backdrop, Moody’s maintained a stable outlook for the real estate giant, projecting steady EBITDA expansion and prudent capital management over the near term. Further rating upgrades could materialize if the company sustains a leverage ratio below 3.5x and interest coverage above 3.5x, whereas a pivot toward a more aggressive financial policy or operational weakening would trigger downward rating pressure.

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