Fitch lowers MMI to negative

Fitch Ratings said it affirmed MMI International Ltd.’s long-term foreign-currency issuer default ratings at BB-, along with the long-term foreign-currency issuer default rating at BB- on its parent company, Precision Capital Private Ltd.

The outlook also was revised to negative from stable.

Fitch also said it affirmed the MMI International’s senior secured debt class rating at BB-, $300 million 8% senior secured notes due 2017 at BB- and $180 million secured bank loan at BB-.

The change in the outlook reflects an expectation that EBITDA growth will be slower than previously thought due to the modest recovery in the hard disk drive (HDD) market, Fitch said.

MMI faces high customer concentration risk due to its heavy reliance on Seagate Technology plc, which contributed 80% of its revenue in the first quarter of 2015, the agency said.

But, Fitch said it believes the high interdependence between MMI and Seagate, with MMI being Seagate’s largest supplier for three key HDD components, mitigates this risk.

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