Moody’s drops Officine Maccaferri, notes to B3

Moody's Investors Service said it downgraded Officine Maccaferri SpA's corporate family rating to B3 from B2 and probability of default rating to B2-PD from B1-PD.

Concurrently, the agency downgraded the senior unsecured rating assigned to the €190 million notes due in 2021 to B3 from B2 with a loss given default (LGD) assessment of LGD5.

The outlook was changed to negative from stable.

"Today's downgrade of Officine Maccaferri's ratings reflects our expectation that soft trading conditions will continue to pressure the company's top-line and margins in the next 12 to 18 months, resulting in credit metrics deteriorating to a level not compatible with a B2 rating," Paolo Leschiutta, Moody’s vice president, senior credit officer and lead analyst for Officine Maccaferri, said in a news release.

The downgrade and negative outlook reflect the company's weak operating performance in the first half of 2016 that was far below Moody's expectation, as well as the agency's view that the company's business profile has proven to be more volatile than originally built into the B2 corporate family rating.

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