Moody's lowers Europcar

Moody's Investors Service said it downgraded Europcar Groupe SA's corporate family and probability-of-default ratings to B1 from Ba3, its €430 million senior subordinated secured floating-rate notes to B2 from B1 (LGD4, 69%) and €375 million senior subordinated unsecured notes to B3 from B2 (LGD6, 93%).

The outlook is stable.

The downgrade reflects "Moody's revised expectation that Europcar will not now achieve - over the next 12 to 18 months - the thresholds necessary in order for it to maintain a stable rating outlook in the Ba3 rating category," Christian Hendker, Moody's analyst, said in a written statement.

Europcar's B1 corporate family rating reflects the company's strong brand and market position in key European rental car markets, regional diversification enhanced by stable earning contributions from its global franchise network and relatively stable operating performance, the agency said.

The ratings also reflect limited absolute scale, relatively weak debt protection measures, high exposure to rising interest rates and prospect of increasing debt levels for an expanding fleet, Moody's said.

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