Moody’s drops Emeco to B3

Moody's Investors Service said it downgraded Emeco Holdings Ltd.’s corporate family rating to B3 from B2 and Emeco Pty Ltd.'s senior secured rating to B3 from B2.

The outlooks were changed to negative from stable.

"The rating downgrade reflects the continued significant weakness in key commodity prices which is pressuring Emeco's credit profile to a level that is no longer consistent with the previous rating," Moody's analyst Saranga Ranasinghe said in a news release. "The steep drop in oil prices is also constraining the outlook on Emeco's Canadian oil sands operations."

"Our expectation is that operating conditions for mining services companies will remain weak through 2016, increasing uncertainty around Emeco's ability to improve earnings and delever," Ranasinghe added in the release.

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