S&P lowers HMS Hydraulic

Standard & Poor’s said it lowered its long-term corporate credit rating on HMS Hydraulic Machines & Systems Group plc to CCC from B- and kept it on CreditWatch with negative implications.

At the same time, S&P lowered the issue rating on the RUB 5.1 billion currently outstanding notes issued by HMS’ subsidiary, CJSC Hydromashservice, to CCC- from CCC+ and kept them on CreditWatch negative.

The recovery rating on the notes is unchanged at 5, indicating an expectation of modest (10%-30%) recovery in the event of a payment default.

S&P said the downgrades reflect S&P’s opinion that HMS could face default within the next two months, unless the company is able to attract sufficient funds to redeem its RUB 2.1 billion of senior unsecured bonds maturing in February 2015.

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