Monday, September 1, 2014

Fitch warns it may lower Whirlpool's credit rating

Fitch says it may lower Whirlpool's credit rating because of $1 billion deal to buy Indesit
Posted on July 14, 2014 at 12:00 a.m. | Updated on July 14, 2014 at 11:54 a.m.

NEW YORK (AP) — Fitch Ratings warned Monday that it could lower Whirlpool Corp.‘s credit rating after the appliance maker announced a plan to buy Italian rival Indesit for more than $1 billion.

Whirlpool, which owns the Maytag, KitchenAid and other brands, said last week that the deal to buy Indesit will help it expand in Europe. Indesit makes washing machines, dryers, dishwashers, ovens and other appliances. The acquisition is expected to close by the end of the year.

Fitch said it is putting Whirlpool on “Rating Watch Negative” because the acquisition will increase the company’s debt. Fitch said it may lower the company’s credit rating down one notch to “BBB-” from “BBB.” A “BBB-” rating is still considered investment grade, but is one step away from being considered a “non-investment grade” and can signal that it is at a higher risk of defaulting on its loans.

Fitch said it will meet with Whirlpool executives in the next month to review its finances.

Fitch also said that while the deal will help Whirlpool expand its business in Europe, demand for appliances in the region is “relatively weak.”

A representative from Whirlpool did not immediately respond to a request for comment.

Shares of the Benton Harbor, Michigan-based company fell $1.75, or 1.2 percent, to $139.01 in midday trading Monday. Its shares have fallen more than 10 percent in 2014.

 ADVANCE FOR WEEKEND EDITIONS, AUG. 30-31 AND THEREAFTER -- In this September 2013 photo, Lake Linden-Hubbell High School biology students, from left, Abby Sutherland, Becky Nakkula, Carli Ongie and Lucas Klein take measurements at the Torch Lake, Mich., Superfund site. Lake Linden’s stamp sand monitoring is sponsored by the Lake Superior Stewardship Initiative. (AP Photo/Daily Mining Gazette, Garrett Neese)

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 ADVANCED FOR RELEASE MONDAY, SEPTEMBER 1, 2014 Dark chocolate caramels with sea salt roll out at the Morley Sanders factory in Clinton Twp., Thursday, Aug. 21, 2014. (AP Photo/Detroit Free Press, Jessica J. Trevino)

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