Moody’s downgrades Petrofac

Moody’s Investors Service said it affirmed the Baa3 long-term issuer rating and Baa3 senior unsecured notes rating of Petrofac Ltd.

The outlook was changed to negative from stable.

The negative outlook reflects expectations that leverage over the next two years will be higher than previously expected, Moody’s said.

Limited de-leveraging is expected in 2017, the agency said.

Although the company could potentially reduce leverage by selling part of its Mexican assets or reducing dividends, no announcements were made, Moody’s said.

Asset sales also would result in reduced scale for Petrofac, which is already small compared to many investment-grade rated peers, the agency said.

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