LONDON, July 25 (IFR) - Fitch ratings agency downgraded Peugeot SA to BB from BB+ on Wednesday citing the rating agency’s revised expectations for revenue, profitability and underlying cash generation, following the group’s first half results and revised guidance.
Earlier on Wednesday Europe’s second-largest car maker posted a EUR662m first-half loss in its auto division, dragging its group bottom line into the red - a risk it had warned of earlier this month when announcing 8,000 French job cuts and a plant closure.
Fitch previously commented that a negative rating action could stem from a sharper-than-expected fall in global sales in 2012, leading to negative operating margins and weaker financial metrics.
The five-year CDS on Peugeot has widened by 29% since the start of the year, and now stands at 790bp, some 4.4% tighter on the day. (Reporting By Josie Cox; editing by Alex Chambers)