Moody's may downgrade Avio

Moody's Investors Service said it placed the B1 corporate family rating of Avio Holding SpA on review for possible downgrade following the decision by Carlyle and Finmeccanica, which own 70% and 30% of Avio respectively, to sell their stakes to Cinven Ltd., a private equity firm. The transaction values Avio at about €2.6 billion including debt. Finmeccanica will retain an interest in Avio.

The agency said its review will consider the new capital structure following the transaction as well as the financial strategy of the new majority owner. Moody's will focus in particular on the resulting financial leverage, the position of the debt within the capital structure and the capability of the company to service any additional amount of debt through its internal cash flow generation.

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