Moody's downgrades Hella

Moody's Investors Service said it downgraded Hella GmbH & Co. KGaA rating to Baa3 from Baa1 following the closing of the acquisition of a 79.5% stake by Faurecia, which the agency rates Ba2. The outlook has been changed to negative from ratings under review. These actions conclude the rating review for downgrade initiated on Aug. 20.

Following the final closing of the acquisition, Faurecia will hold a 79.5% stake in Hella, the agency said it continue assessing Hella’s credit risk to be partly independent and of a lower risk compared to Faurecia’s credit risk

“Hella's two notch higher rating compared to Faurecia is based on our view that Hella has to act and operate in the interest of all its shareholders (including the minority shareholders) providing limitations on the integration of Hella into the operations of Faurecia, i.e. absence of profit and loss and a domination agreement, and the existence of a significant share of minority shareholders,” Moody’s said in a press release.

The negative outlook reflects the negative outlook of Faurecia, the agency said.

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