MILAN, Sept 19 (Reuters) - Rating agency Moody’s Investors Service cut Italian defence and aerospace group Finmeccanica to ‘junk,’ saying the company was improving at a slower-than-expected pace, and after extensive delays in planned sales worth 1 billion euros ($1.35 billion).
The agency lowered Finmeccanica’s credit rating to Ba1 from Baa3, thus bringing it to non investment-grade.
“The downgrade incorporates our expectation of a slower pace of improvement in Finmeccanica’s overall operating performance and credit profile,” said Russell Solomon, Moody’s Senior Vice President and lead analyst for the company.
Fitch Ratings already cut Finmeccanica to junk in June.
Analysts have said rating downgrades to speculative-grade could impact the ability of Finmeccanica, Italy’s second-largest private sector employer, to receive pre-payments from customers and harm its competitiveness outside Italy.
Finmeccanica had wanted to sell a number of the company’s assets by the end of this year. But political wrangling has slowed the sale of AnsaldoEnergia, AsaldoBreda and Ansaldo STS .
Finmeccanica generates over half of its revenues from defence markets including Italy, the US and Britain which are facing uncertain budget outlooks.
Finmeccanica is targeting a net profit in 2013 after two years in the red. It has been hit by a corruption probe relating to a helicopter deal in India and has recently named a new chairman.