Research Update: Doosan Bobcat Inc. 'BB-' Rating Affirmed As Improving Financials Offset By Parent's Relatively Weak Liquidity

We expect Bobcat's stable earnings from the U.S. and gradually declining debt will support the compact-equipment maker's robust financial metrics over the next 12-24 months, providing a buffer against growing investments for diversification. As a result, we have revised our SACP for Bobcat to 'bb+' from 'bb'. Yet, we expect parent DI group's relatively weak liquidity position to persist in the short term, constraining the ratings on Bobcat. On April 29, 2019, S&P Global Ratings affirmed its 'BB-' long-term issuer credit rating on Bobcat. We also affirmed our 'BB' issue rating on the $971 million senior secured term loan with a recovery rating of '2' that Bobcat guarantees. The stable outlook reflects our expectation that Bobcat's well-established market position and

...- We expect Bobcat's stable earnings from the U.S. and gradually declining debt will support the compact-equipment maker's robust financial metrics over the next 12-24 months, providing a buffer against growing investments for diversification. As a result, we have revised our SACP for Bobcat to '##+' from '##'. - Yet, we expect parent DI group's relatively weak liquidity position to persist in the short term, constraining the ratings on Bobcat. - On April 29, 2019, S&P Global Ratings affirmed its '##-' long-term issuer credit rating on Bobcat. We also affirmed our '##' issue rating on the $971 million senior secured term loan with a recovery rating of '2' that Bobcat guarantees. - The stable outlook reflects our expectation that Bobcat's well-established market position and good cash flow will help it to maintain its financial metrics over the next one to two years....

Research Update