Moody's (NYSE:MCO) downgraded EXCO Resources (NYSE:XCO) from "Positive" to "Developing" on the proposed buyout of the company and taking it private being a distraction to management.
Other agencies joined the downgrade bonanza, with Morgan Keegan downgrading them from "Outperform" to "Market Perform," MBO Capital downgraded them from "Outperform" to "Market Perform" as well, and Scotia Capital also downgraded XCO from "Sector Outperform" to "Sector Perform."
Price targets stood at $20 from Morgan, increased from $17 to $21 by BMO, and from $20 to $20.50 by Scotia.
Standard & Poor's Rating Service put the "BB-" corporate credit rating and "B" senior unsecured debt rating on negative credit watch.
Ratings could be lowered depending on the success of the takeover and how the financing is structured, concluded Standard & Poor's.
Moody's sees the process itself as being detrimental to the company, no matter what the ultimate terms of the deal may end up being.
No comments:
Post a Comment