Moody's: Caterpillar outlook stable

Moody's Investors Service said it changed the outlook for Caterpillar, Inc. and Caterpillar Financial Services Corp. to stable from negative. The companies' A2 long-term ratings and Prime-1 short-term ratings were affirmed.

The stable outlook reflects expectation that the company has ample operating and financial strengths to restore credit metrics to levels that are much stronger than current levels, and which will solidly support the A2 rating by 2011, according to the agency.

Moody's said it expects debt-to-EBITDA ratio to be near 3x, compared with 4.7x in 2009.

The stabilization of the outlook is also supported by the company's commitment to maintaining a strong liquidity position, the agency said.

The key risks remain the cyclicality of the company's industrial markets and the considerable refunding and liquidity requirements of Caterpillar Financial, the agency noted.

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