Emeco rating downgraded following merger announcement

Company News

by Jessica Amir

Ratings house, Moody’s has downgraded Emeco Holdings Limited (ASX:EHL) 2019 notes to a rating of ‘Ca’.

The earthmoving equipment company says it was a consequence of its merger with Andy's Earthmovers and Orionstone Holdings which was announced last week.

Under Moody’s Investors Services definition, the recapitalisation of Emeco, and the merger constitutes a ‘distressing exchange’, whereby Emeco ‘offers creditors a new or restructured debt’.

Moody’s also noted that Emecos ‘leverage is expected to reduce’ and it has reaffirmed Emerco’s corporate family rating at ‘Caa1’.

Once the transaction is finalised on 31 March 2017, Moody’s will review both the new senior notes secured and the company’s corporate rating.

Shares in Emeco closed last traded 4% lower at 7.2 cents.
 

Jessica Amir

Finance News Network
Jessica is a senior finance journalist and presents the Market Outlook, Market at Midday and Market Wrap. She also presents ASX company news and interviews CEOs. She joined FNN in January 2017 with six years of broadcast journalism experience. She worked as a journalist and producer with Sky News Business, ABC 1, ABC's The Business and ABC24. She also worked in regional Australia for Prime 7 and WIN News as a TV reporter. In her prior life she worked as a financial planner.