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Announcement of Periodic Review: Moody's announces completion of a periodic review of ratings of Titan International, Inc.
Global Credit Research - 25 Aug 2020
New York, August 25, 2020 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Titan International, Inc. and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since 1 January 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion.
This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.
Key rating considerations are summarized below.
Titan International, Inc.'s Caa3 corporate family rating reflects the company's very high financial leverage, exposure to cyclical end markets and customer concentrations, and weak liquidity profile characterized by low cash balances relative to prior downturns and reliance on asset sales. Moody's expects Titan's top line, especially in its Earthmoving/Construction segment, to be down significantly in 2020 before improving demand sentiment occurs in 2021. Despite various cost saving initiatives being undertaken by the company and low raw material costs, Titan's earnings will remain pressured with expectation for negative EBITA margins. Free cash flow generation is also expected to be negative in 2020 as working capital improvements and lower capital spend are unlikely to offset the decline in earnings. Titan has used proceeds from asset sales during 2020 to reduce debt and support its liquidity in the near-term.
This document summarizes Moody's view as of the publication date and will not be updated until the next periodic review announcement, which will incorporate material changes in credit circumstances (if any) during the intervening period.
The principal methodology used for this review was Manufacturing Methodology published in March 2020. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.
This announcement applies only to EU rated and EU endorsed ratings. Non EU rated and non EU endorsed ratings may be referenced above to the extent necessary, if they are part of the same analytical unit.
This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.
Mike Cavanagh Analyst Corporate Finance Group Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Robert Jankowitz MD - Corporate Finance Corporate Finance Group JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Releasing Office: Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653
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