Moody’s lowers Carpenter debt to Ba2

Moody's Investors Service said it downgraded Carpenter Technology Corp.’s senior unsecured ratings to Ba2 from Baa3 and assigned a Ba2 corporate family rating, a Ba2-PD probability of default rating and a SGL-2 speculative grade liquidity rating.

The outlook is stable.

Moody’s said the downgrade reflects the ongoing contraction in Carpenter's debt protection metrics and increased leverage position as evidenced by the company's EBIT/interest ratio of 2.8 times and debt/EBITDA ratio of 3.9 times for the 12 months ended Dec. 31 (using Moody's standard adjustments, principally for pensions and leases). Performance in the second quarter evidenced a sequential decline from the prior quarter and while seasonal factors are partially responsible, the general operating landscape remains challenging.

Based upon the current run rate and expectations that the next several quarters will be no better than the quarter ended Dec. 31, these metrics are expected to further weaken.

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