Moody's rates Fluor converts A3

Moody's Investors Service said it assigned an A3 debt rating to Fluor Corp.'s new $300 million convertible senior unsecured notes due 2024.

Proceeds from the notes will be used to repay maturing debt obligations, to build working capital for new projects, and for general corporate purposes.

Moody's said Fluor's A3 long-term and Prime-2 short-term debt ratings reflect the company's position as a global engineering, procurement and construction, and maintenance company, its diversified book of business, and its conservative financial philosophy and commitment to maintaining its financial flexibility.

The rating also reflects, however, the highly competitive and cyclical nature of Fluor's end markets, as well as the significant near-term cash flow pressures resulting from a decline in new business within the power segment, lower advance payments as a result of the completion of certain construction projects, and a build up of working capital associated with the ramp-up of new projects, especially within the oil & gas segment.

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