Moody’s downgrades Gestamp

Moody’s Investors Service said it downgraded the corporate family rating of Gestamp Automocion, SA to B1 from Ba3 and the probability of default rating to B1-PD from Ba3-PD.

Concurrently, Moody’s confirmed B1 ratings of the backed senior secured notes issued by Gestamp and Gestamp Funding Luxembourg SA. The agency also revised the outlook to stable from under review.

This action concludes a review for possible downgrade that began on March 26, Moody’s said.

“The downgrade of Gestamp’s CFR reflects the expectation that Gestamp’s leverage and margins will remain too weak for a Ba3 through 2021,” said Matthias Heck, a Moody’s vice president, senior credit officer and lead analyst for Gestamp, in a press release.

The stable outlook reflects the expectation Gestamp will generate positive free cash flows, supported by reduced growth capex spending and absent of dividends, the agency said.

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