Moody’s trims Whirlpool

Moody's Investors Service said it downgraded Whirlpool Corp.'s senior unsecured notes and long-term issuer ratings to Baa2 from Baa1. Moody's also trimmed the backed senior unsecured notes ratings for its guaranteed subsidiary borrowers, Whirlpool EMEA Finance Sarl (WEF) and Whirlpool Finance Luxembourg Sarl (WFL) to Baa2 from Baa1.

The agency noted it also changed the outlook for Whirlpool, WEF and WFL to stable from negative.

“The ratings downgrade reflects continued pressure on Whirlpool's profitability stemming from weaker consumer demand, which Moody's anticipates will remain muted for the remainder of 2024. The downgrade also reflects Whirlpool's high financial leverage, currently at 4.7x gross debt to EBITDA as of Dec. 31, 2023, and the challenges to reduce financial leverage to below 3x over the next 12-18 months given low projected earnings growth and free cash flow that is being limited by a high dividend,” the agency said in a press release.

Moody’s said it expects Whirlpool to keep concentrating on cutting its leverage to its target level and sustain “modestly positive free cash flow over the next 12-18 months.”

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