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Moody’s downgrades Pactera
Moody’s Investors Service said it downgraded the corporate family rating of Pactera Technology International Ltd. to B1 from Ba3.
Moody’s also said it downgraded the senior secured debt rating on the bonds issued by BCP Singapore VI Cayman Financing Company Ltd. to B1 from Ba3. The bonds are guaranteed by Pactera.
The outlook is stable.
The downgrades reflect a concern that ongoing challenges will keep Pactera’s operating margin at a level that more closely matched with that of its single-B rated peers, Moody’s said.
Pactera’s adjusted operating margin fell to less than 3% in the first nine months of 2015 from 8.7% for 2014, the agency said.
The fall in its operating margin was the result of higher sales costs amid increasing wages in China and a weakened economic performance in Europe, Moody’s said.
Such weak market conditions are expected to persist over the next 12 to 18 months, the agency said.
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