Moody's downgrades Mahle

Moody's Investors Service said it downgraded the corporate family rating and the senior unsecured instrument ratings of Mahle GmbH to Ba2 from Ba1.

Concurrently, the agency lowered the company's senior unsecured euro medium-term note program rating to (P)Ba2 from (P)Ba1 and the probability of default rating to Ba2-PD from Ba1-PD.

"The rating downgrade reflects challenges to pass on higher raw material and energy costs and the ongoing challenges in the thermal management and electronics and mechatronics divisions, reflected in weak margins and elevated leverage, which are not commensurate with the expectations for the Ba1 rating category," said Matthias Heck, a Moody's vice president, senior credit officer and lead analyst for Mahle, in a press release.

"We positively recognize Mahle's good liquidity profile, which provides the company with a solid cushion until performance is restored to adequate levels for the Ba2 rating category," Heck added.

The outlook is negative.

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