Moody's confirms Whirlpool

Moody's Investors Service said it confirmed Whirlpool Corp.'s Baa2 senior debt rating, concluding the review for downgrade that began July 11. The outlook is stable.

On July 10, Whirlpool entered into an agreement to acquire 66.8% of the voting stock of Indesit Co. SpA. On Sept. 15, Whirlpool received the China Securities Regulatory Commission's approval to acquire a 51% equity stake in Hefei Rongshida Sanyo Electric Co., Ltd.

"The rating confirmation reflects our view that the Indesit and Hefei Sanyo acquisitions will provide Whirlpool with long-term strategic international growth platforms to complement its strong market position in North America," Kevin Cassidy, senior credit officer, said in an agency news release. The acquisitions will temporarily weaken credit metrics, but Whirlpool's leverage and financial flexibility will return to acceptable levels within 12 to 18 months as the company repays debt with free cash flow, the agency predicted.

Moody’s said Whirlpool's Baa2 rating reflects its significant scale, considerable geographic diversification, strong brand names and good liquidity profile.

The ratings are constrained by the highly cyclical nature of the consumer appliance business, which can result in sharply lower earnings and cash flow during weak economic times, the agency added.

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