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 presents the Market Outlook on Monday and Friday. She joined FNN in January 2017. She has been in broadcast journalism for over five years. She has worked as journalist with Sky News Business, ABC 1 and ABC24. She has also worked in regional Australia for Prime 7 and WIN News. She is also a qualified financial planner and a Masters of Applied Finance student.