Moody's downgrades OHL

Moody's Investors Service said it downgraded the corporate family, probability-of-default and senior unsecured debt ratings of Obrascon Huarte Lain SA to Ba2 from Ba1.

The outlook is negative.

"The downgrade reflects the weakened financial profile of OHL's recourse activities resulting from the deteriorating performance of the Spanish construction business and the increased debt linked to higher working capital needs," Ivan Palacios, a Moody's vice president, said in a statement.

"At the same time, OHL's consolidated financial profile has also deteriorated as a result of the increase in limited-recourse debt linked to the growth of the group's concession activities. These trends are no longer consistent with the group's previous Ba1 rating," Palacios said.

For the recourse business, Moody's said it expects gross reported recourse debt to recourse EBITDA to stay below 4 times, which is expected to be broadly in line with net reported recourse debt/recourse EBITDA of around 2.5x to 3.0x.

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