Moody’s lowers Leighton to Baa3

Moody's Investors Service said it downgraded the issuer rating of Leighton Holdings Ltd. and senior unsecured rating of Leighton Finance (USA) Pty Ltd to Baa3 from Baa2.

The outlook is stable.

The action concludes the review for downgrade initiated in March following the decision by Leighton's majority shareholder, Hochtief Aktiengesellschaft (unrated) to increase its stake in Leighton from 58.8% to a maximum of 73.82% and to assume Board control.

Hochtief presently has 69.62% shareholding in Leighton with the majority of the board now appointed by Hochtief.

"The downgrade to Baa3 follows the assumption of effective control of Leighton by Hochtief and reflects the materially weaker credit profile of Hochtief on a stand-alone basis, i.e. excluding Leighton," Moody's vice president and senior credit officer Maurice O'Connell said in a news release.

At the same time, the Baa3 rating reflects Leighton's fundamental credit profile which is of investment grade quality, but which has been impacted by a substantial increase in receivables including at one of its largest contracts on hand (Gorgon LNG). "This has weakened Leighton's credit quality," O'Connell said in the release.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.