Moody's lowers VAC

Moody's Investors Service said it downgraded VAC Finanzierung GmbH's corporate family and probability-of-default ratings to B3 from B2 and its senior secured bonds to Caa1 from B3.

The outlook continues to be negative.

The downgrade reflects the agency's revised expectation that subsidiary Vacuumschmelze GmbH & Co. KG is unlikely to improve its performance and credit metrics over the medium term in light of a more challenging macroeconomic environment.

Moody's said it recognizes that Vacuumschmelze has preserved a solid liquidity position and sufficient availability under a €40 million liquidity facility.

The negative outlook considers the uncertainty about the magnitude and duration of a performance erosion and the heightened challenge for Vacuumschmelze to remain in compliance with financial covenants under its credit facilities as the covenants step up over the next quarters, Moody's said.

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