Moody's Investors Service has downgraded the outlook on Croatia's food and retail group Agrokor's ratings to stable from positive, while affirming the company's B2 ratings.
The change in outlook to stable from positive reflects the fact that the company's headroom under its bank covenants has not improved as had been expected by Moody's when the positive outlook was assigned in December 2010, says Tanya Savkin, Moody's analyst for this Croatian company.
"Whilst Moodys recognizes the significant improvements made over recent years to improve Agrokor's debt maturity profile, the change in outlook also reflects the company's short term indebtedness which Moody's views in particular against the backdrop of an increasingly difficult European financing environment," Savkin was quoted as saying.
A rating upgrade could occur if operational performance and financial discipline lead to improvements, according to the statement which that international provider of credit ratings issued on Thursday.
