Rating Upgrade Overview
Moody's Investors Service upgraded Ingersoll Rand Inc.’s senior unsecured notes rating to Baa1 from Baa2 on Thursday, changing the outlook from positive to stable, and affirmed the company’s Prime‑2 short‑term commercial paper rating.
Financial Metrics Supporting Upgrade
The agency highlighted the company’s manufacturing EBITDA margins of approximately 26%, low capital‑expenditure requirements, and expectations that debt‑to‑EBITDA will stay around 2.5×, which together underpin robust free‑cash‑flow generation and financial flexibility.
Sales Performance and Guidance
Ingersoll Rand’s organic sales declined 1% in 2025 and more than 3% in 2024, driven by weak short‑cycle industrial demand that represents about 80% of total sales. Recent Purchasing Managers’ Index data have stabilized and remained positive over the last few quarters. The company projects flat to 2% organic sales growth for 2026.
Acquisitions and Debt Profile
Over the past five years the company has acquired more than 75 businesses. The June 2024 acquisition of ILC Dover for $2.4 billion increased debt‑to‑EBITDA by roughly one point to 2.8×. Moody’s forecasts annual free‑cash‑flow‑to‑debt ratios in the high‑teens for the coming years.
Liquidity Position
Moody’s expects Ingersoll Rand to maintain at least $750 million of cash on hand and to have ample liquidity under its $2.6 billion revolving credit facility.