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Moody's Downgrades thyssenkrupp to B1

Steel News - Published on Wed, 19 Feb 2020

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Moody's Investors Service has downgraded to B1 from Ba3 the corporate family rating (CFR) and to B1-PD from Ba3-PD the probability of default rating f German steel and diversified industrial company thyssenkrupp AG. Concurrently, Moody's downgraded to B1 from Ba3 the ratings on the group's senior unsecured debt instruments, including the debt issuance programme. Moody's further affirmed the short-term ratings of tk at NP/(P)NP. The outlook on all ratings has been changed to developing from negative.


..Issuer: thyssenkrupp AG

....Commercial Paper, Affirmed NP
....Other Short-Term, Affirmed (P)NP

.... LT Corporate Family Rating, Downgraded to B1 from Ba3
.... Probability of Default Rating, Downgraded to B1-PD from Ba3-PD
....Senior Unsecured Medium-Term Note Program, Downgraded to (P)B1 from (P)Ba3
....Senior Unsecured Regular Bond/Debenture, Downgraded to B1 from Ba3

Outlook Action:
....Outlook, Changed To Developing From Negative

RATINGS RATIONALE - The downgrade to B1 reflects the further weakening operating performance and negative free cash flow generation of tk with a reduced likelihood of a material recovery over the next quarters against Moody's previous expectation of a strengthening profitability and cash generation. Credit metrics are currently weaker than required for the B1 rating category but are expected to be materially strengthened by the execution of upcoming asset disposals. The assigned developing outlook balances the expected positive impact from a timely execution of asset disposals and upcoming cash inflows over the next quarters with the ongoing challenges of a sustainable turnaround of profitability and free cash flow generation of tk's residual businesses.

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Posted By : Rabi Wangkhem on Wed, 19 Feb 2020
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