Moody’s drops Power Machines

Moody's Investors Service said it downgraded the corporate family rating and the probability of default rating of Power Machines OJSC to Ba2 from Ba1 and to Ba2-PD from Ba1-PD, respectively.

The outlook is negative.

At the same time, Moody's Interfax Rating Agency downgraded the company’s national scale corporate family rating to Aa2.ru from Aa1.ru.

The action concludes the review for downgrade of Power Machines’ ratings, which was part of the review for downgrade of ratings of 45 Russian non-financial corporates launched on Dec. 23.

The review was prompted by the severe and rapid deterioration in the operating environment in Russia and the heightened risk of a more prolonged and acute economic downturn than originally expected.

Moody’s said the downgrade reflects its expectation that Power Machines, a Russian manufacturer of equipment and integrated solution for power generation businesses, will be negatively affected by the weakening of Russia's economic and financial environment, as captured by Moody's downgrade of Russia's sovereign rating and country ceiling to Ba1 from Baa3 with negative outlook on Feb. 20.

In the agency’s view, in this environment, the company's financial flexibility will weaken and leverage may increase to levels not commensurate with the Ba1 rating category for Power Machines’ high business risk profile.

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