Moody’s downgrades Senvion, notes

Moody's Investors Service said it downgraded Senvion SA’s corporate family rating to B2 from B1 and probability of default rating to B2-PD from B1-PD.

Concurrently, the agency downgraded the rating of the senior secured notes issued by Senvion Holding GmbH to B3 from B2.

The outlook was changed to stable from negative.

"Moody's decision to downgrade Senvion's ratings by one notch was triggered by the more challenging operating conditions in the wind turbine market and the expectation that Senvion's credit metrics will remain sustainably weaker than previously expected by Moody's, despite the expectation of better performance in 2019. Senvion closed the year 2017 at a higher leverage than previously anticipated (6.0x debt/EBITDA, as adjusted by Moody's) in combination with a cautious guidance given by Senvion for 2018. As a result of the intense price pressure in the industry, Senvion expects to reach revenues around 2017 level and a Senvion adjusted EBITDA margin in a range between 5.0-6.5%, which compares to 8% in 2017," Oliver Giani, Moody’s lead analyst for Senvion, said in a news release.

"Against the backdrop of the challenges the wind turbine industry is currently facing this lead Moody's to update its base case scenario for Senvion. Moody's now expects weaker credit metrics than previously anticipated for 2018 and a slower path of recovery thereafter, which finally lead to the downgrade."

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