Moody’s changes Valeo view to negative

Moody's Investors Service said it changed the outlook on the ratings of Valeo SA to negative from stable.

Concurrently, the agency affirmed the company's long-term issuer rating and senior unsecured ratings at Baa2 as well as its commercial paper rating at P-2.

“The change in outlook is driven by the recent deterioration of market conditions in Europe and China, and its negative implications on Valeo's credit metrics,” Matthias Heck, Moody's vice president, senior credit officer and lead analyst for Valeo, said in a news release.

“The negative outlook reflects the challenges for Valeo to maintain EBITA margins (Moody's adjusted) above 5.5%, and de-lever below 3x debt/EBITDA and 2x net debt/EBITDA (Moody's adjusted) within the next 12-18 months; levels which are required for a Baa2 rating.”

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