Moody's downgrades Kongsberg

Moody's Investors Service said it downgraded the corporate family rating to B1 from Ba3 and the probability of default rating to B1-PD from Ba3-PD of Kongsberg Automotive ASA. Concurrently, the agency downgraded the ratings of the €275 million senior secured notes issued by its financing subsidiary Kongsberg Actuation Systems BV to B1 from Ba3. The outlook remains stable.

“The downgrade of Kongsberg's ratings reflects significant negative Moody's free cash flow (FCF) generation over the first nine months of 2019 leading to a weaker than expected but still adequate liquidity buffer,” said Dirk Steinicke, a Moody's analyst, and lead analyst for Kongsberg, in a press release.

“The current challenges in the global-light and heavy-duty vehicles' markets will increase pressure on Kongsberg's plan to meaningfully improve free cash flow generation mainly driven by working capital optimizations in the next 12-18 months,” he said.

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