Moody’s reviews Allegheny Technologies

Moody's Investors Service said it placed Allegheny Technologies Inc.'s Baa3 senior unsecured bond ratings under review for possible downgrade.

Moody’s said the review results from the continuing weak debt protection metrics as evidenced by the EBIT/interest and debt/EBITDA ratios for the 12 months ended June 30 of 0.1 times and 9.2 times, respectively, and the agency’s expectation that improvement in financial metrics could be over a longer time horizon than appropriate for the current rating.

While it believes that the downward pressure on earnings has bottomed, Moody’s said improvement in end markets remains at a modest pace while the benefits from the strategic investment in the Hot-Rolling and Processing Facility and the Rowley premium quality qualification program currently in process will only likely be evident over the 2015/2016 time frame. During this period, ongoing associated costs and less than optimal capacity use levels are likely to persist.

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