Moody's downgrades Imperial Group

Moody's Investors Service said it downgraded Imperial Group (Pty) Ltd.'s ZAR 1.2 billion senior unsecured bonds due 2008, ZAR 1 billion senior unsecured bonds due 2010 and ZAR 1.5 billion senior unsecured bonds due 2014 and Imperial Mobility Finance BV's €300 million 4¾% eurobond senior secured bonds to Baa2 from Baa1.

The agency also affirmed Imperial's long-term national scale issuer rating and senior unsecured issue ratings at A1.za and short-term national scale issuer rating at Prime-1.za.

The outlook remains negative.

The downgrade reflects Moody's view that the trading environment in which Imperial operates is likely to have a significantly greater negative impact on the company than the agency initially expected. In addition, Moody's believes the asset disposals and closure of the loss-making commercial vehicle division announced by Imperial recently are imperative to rid the group of loss-making and/or debt-intensive businesses and allow it to focus on its core vehicle and transportation activities.

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