(Adds company statement)
ATLANTA Jan 22 Moody's Investors Service
downgraded credit ratings on Whirlpool Corp (WHR.N) on Thursday
and revised its outlook on the appliance maker to negative, citing
the pullback in discretionary consumer spending.
The action follows a move by Standard & Poor's, which cut
ratings on Whirlpool to one notch above speculative, or "junk"
status, earlier this week and said it expects demand for home
appliances to fall this year.
Whirlpool's shares were down 5 percent to $35.62 in afternoon
New York Stock Exchange trading.
The lower ratings could make raising funds through the credit
markets more expensive.
"We don't have any comment on the actions taken by S&P or
Moody's, except to say that given the state of the industry, these
changes are not surprising," Whirlpool spokeswoman Jill Saletta
said in an email.
Moody's cut its Whirlpool senior unsecured rating to Baa3 from
Baa2. The company's commercial paper rating was downgraded to
Prime-3 from Prime-2.
The recession and credit crunch are compounding woes of
appliance makers, which were already struggling in the wake of the
U.S. housing slump.
Whirlpool has posted lower quarterly earnings during 2008,
hurt by higher materials costs and falling appliance sales in
North America, its biggest market.
"While Moody's expects that Whirlpool's free cash flow will
likely improve in 2009 due to working capital benefits, the
sustainability of such improvements may come under pressure" if
spending continues to slow, the ratings agency said.
On Tuesday, S&P cut Whirlpool's corporate credit rating by one
notch to "BBB-minus" and said the outlook was stable.
(Reporting by Karen Jacobs; Editing by Phil Berlowitz)