26 January 2009 16:00 [Source: ICIS news]
LONDON (ICIS news)--Moody’s has downgraded its credit rating on UK-based petrochemicals producer INEOS as the group struggles with deteriorating operating conditions, the ratings service said on Monday.
Moody's dropped INEOS’s corporate family rating from “B3” to “Caa2” – a grade given to companies with “extremely poor credit quality”.
Moody’s said recent operating figures from INEOS suggested a substantial weakening in the operating environment and some reduction in its liquidity position.
“Lower liquidity guidance and further deterioration in the market conditions and the outlook for 2009 [have] increased Moody's estimate of default probability and resulted in the downgrade of the ratings,” Moody’s said in a statement.
Moody’s also gave INEOS a negative outlook, reflecting Moody’s expectation that the challenging operating environment would continue to affect the company’s credit profile in the medium term.
INEOS reported profits of €300m ($390m) in the fourth quarter of 2008 and €1.6bn for the full year, also posting much higher-than-expected inventory losses of over €1bn.
Moody’s downgrade followed a similar move by credit agency Standard & Poor's (S&P), which lowered its long-term corporate rating for INEOS to “CCC” from “B-” with a negative outlook.
($1 = €0.77)
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