Moody's downgrades Matador

Moody's Investors Service said it downgraded the long-term national scale rating of Matador Automotive Vrable, as to Ba1.sk from Baa3.sk.

The rating remains on review for further downgrade.

The agency said the downgrade is due to deteriorating business results, with rapidly declining sales compared to the previous year, and the company's stretched capital structure and tight liquidity profile, which is not commensurate with the Baa3.sk rating level.

The Ba1.sk rating incorporates Moody's assumption that a possible early call on the company's €16.6 million bonds due 2011, given Matador's tight liquidity profile, would be timely refinanced by new debt and tangible contributions from the parent company, Matador Holding. Thus, in its review, the agency will focus on a reassessment of Matador's business prospects, the potential for cash realizations from working capital and asset sales and the steps taken by the group toward repayment of the bonds potentially coming due in the short term.

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