Moody's: Pearson view to negative

Moody's Investors Service said it changed the outlook on the Baa1 long-term issuer and senior unsecured ratings assigned to Pearson plc and its subsidiaries to negative from stable.

The Baa1 ratings and the P-2 short-term rating were affirmed.

Moody's said the outlook change follows Pearson's second profit warning for 2013, announced on Jan. 23. In its announcement, Pearson said that the year had seen weaker-than-expected trading in its two largest markets, the U.S. and the UK.

"We are changing the outlook to negative as Pearson's debt protection metrics for fiscal year 2013 are likely to weaken considerably," Moody's assistant vice president, analyst and lead analyst for the issuer Gunjan Dixit said in a news release. "This view reflects Pearson's tough trading conditions, particularly in North America and the UK; the greater-than-originally-anticipated spending on restructuring; and certain start-up costs for new contracts in higher education and increased provisions for returns."

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