Moody’s downgrades Emeco

Moody’s Investors Service said it downgraded Emeco Holdings Ltd.’s corporate family rating to Caa1 from B3.

The agency also said it downgraded Emeco Pty Ltd.’s senior secured rating to Caa1 from B3.

The outlook is negative.

The downgrades reflect the continued significant weakness in key commodity prices and an expectation that operating conditions for mining services companies like Emeco will remain weak through 2016, Moody’s said.

Mining companies will continue to focus on cost-saving programs and the deferral of non-essential capital expenditure, increasing uncertainty around Emeco’s ability to improve earnings and to reduce debt, the agency said.

Prices of coal, copper and oil, which are key products for Emeco, are trading at very weak levels due to poor fundamentals, Moody’s said.

Consequently, the agency said it does not expect any material improvement in the near term.

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