Moody's may cut Hyundai, Kia

Moody's Investors Service said it placed on review for possible downgrade the Baa3 foreign-currency issuer and senior unsecured bond ratings of Hyundai Motor Co. and its guaranteed subsidiary Hyundai Motor Manufacturing Alabama LLC. Kia Motors Co. Ltd.'s Baa3 issuer rating has been placed under review for possible downgrade in view of its close operational and financial linkage with Hyundai Motor.

The downgrade review was driven by concerns over an expected weakening in Hyundai Motor Group's operating performance in 2009 in conjunction with the accelerating downtrend in global auto sales, Moody's said.

This also reflects the increasing liquidity pressure associated with the turmoil in credit markets, the agency said.

A degree of deterioration in Hyundai Motors auto sales is considered inevitable in view of the recessionary conditions in the mature markets and decelerating auto sales trend in the emerging markets, Moody's added.

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