Moody's downgrades Brunswick Rail's ratings to B2; negative outlook
MOSCOW. Nov 27 (Interfax) - Moody's Investors Service has today downgraded Brunswick Rail Limited's (BRL) corporate family rating (CFR) to B2 from B1 and probability of default rating (PDR) to B2-PD from B1-PD, the agency said in a -press release.
Moody's has also downgraded to B2 from B1 the senior unsecured rating on the $600 million Eurobond issued by Brunswick Rail Finance Limited and guaranteed by BRL's key operating subsidiaries. The outlook is negative.
The downgrade reflects Moody's expectation that BRL's financial metrics, which remain beyond thresholds for the company's B1 rating, will continue deteriorating in coming quarters as a result of the ongoing weak market environment characterised by excess supply and substantial pricing pressure on US dollar-linked contracts on the back of rouble depreciation, while the debt of BRL is largely in US dollar.
Brunswick Rail specializes in the operation and financial leasing of rolling stock. The company was established in 2004. As of September 30, 2013, the Brunswick Group owned 24.4% of the operator (including Martin Andersson with 15.8% and Gerard De Geer with 8.6%), Macquarie Renaissance Infrastructure Fund owned 15.1%, International Finance Corporation (IFC) - 13.2%, Sumitomo - 9.1%, VTB Capital - 7%, UFG - 5.6% and Andre Hoffman - 5.2%. The fleet includes around 25,000 rail cars.
