Moody's downgrades Doosan Bobcat's credit outlook

By Nam Kwang-sik

SEOUL, May 21 (Yonhap) -- Global credit appraiser Moody's Investors Service has downgraded its rating outlook on Doosan Bobcat Inc. to stable from positive, retaining the company's rating at Ba3 below investment grade.

Doosan Bobcat, a manufacturer of farm and construction equipment, is 51 percent owned by Doosan Infracore Co., South Korea's leading heavy construction equipment maker and an affiliate of Doosan Heavy Industries & Construction Co., the country's top power equipment maker.

"The change in (Doosan Bobcat Inc.)'s outlook to stable from positive reflects our expectations that its financial leverage over the next 12-18 months will increase because of softer earnings and an increase in debt, as well as increased group-related risks," Wan Hee Yoo, a Moody's Vice President and Senior Credit Officer, said in a report released Wednesday.

Doosan Bobcat said in a regulatory filing that it will offer collateral while guaranteeing the debt of its fully-owned U.S. subsidiary Clark Equipment Co.

The U.S.-based machinery maker Clark Equipment will raise US$300 million by selling 5-year debts to brace for the possibility of prolonged coronavirus pandemic in North America, Doosan Bobcat said.

Another global rating agency, Standard and Poor's Ratings Services, rated Doosan Bobcat at BB, non-investment grade with a negative outlook.

Despite the rating firm's unfavorable outlook, shares in Doosan Bobcat rose 1.85 percent to 24,850 won on the Seoul bourse.

ksnam@yna.co.kr
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