DE- Debt downgraded. Cut Friday after the close.
Moody's Cuts Deere Ratings
Fri Feb 15, 5:34 PM ET
NEW YORK (Reuters) - Moody's Investors Service late Friday downgraded Deere & Co.'s long- and short-term debt ratings, saying slower demand for products from the world's largest farm equipment maker will hurt Deere's balance sheets for at least the rest of 2002.
The rating agency cut Moline, Illinois-based Deere's long-term debt rating one notch to "A3," its fourth-lowest investment grade, from "A2," and its short-term debt rating to "Prime-2" from "Prime-1." The downgrades affect $13 billion of debt, and Moody's rating outlook is stable.
Downgrades often raise borrowing costs, and Moody's action may make it harder for Deere to sell commercial paper. Many investors cannot buy "Prime-2" rated debt, or can buy very little. Moody's said Deere had $6.5 billion of commercial paper and soon-to-mature long-term debt as of January 31.
Moody's said Deere's performance will "remain under significant pressure" in 2002 because of a downturn in Deere's industrial markets, particularly the construction and forestry equipment and commercial and consumer equipment areas. It said, though, that Deere has "sound" liquidity.
Deere on Tuesday posted a first quarter net loss of $38.1 million on sales of $2.52 billion. It has cut North American production 28 percent and sold fewer tractors. |
