Moody's downgrades Cimic

Moody's Investors Service said it downgraded Cimic Group Ltd.’s issuer rating to Baa3 from Baa2 and Cimic Finance (USA) Pty Ltd.'s and Cimic Finance Ltd.'s backed senior unsecured ratings to Baa3 from Baa2 and backed senior unsecured program ratings to (P)Baa3 from (P)Baa2. The agency revised the outlook to stable from ratings under review.

The rating action concludes the review for downgrade started on Feb. 25 after the unconditional and final off-market takeover offer by Hochtief AG to acquire the remaining shares of Cimic it did not already own, Moody’s said. Cimic is now a wholly owned subsidiary of Hochtief.

"The downgrade to Baa3 reflects Cimic's increased gross debt and weakened credit metrics. It also reflects Moody's view that deleveraging to a level commensurate with its previous Baa2 rating will be beyond the 12-18 months of a rating outlook," said Saranga Ranasinghe, a Moody's vice president and senior analyst, in a press release.

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