Research Update: Doosan Bobcat Outlook Revised To Negative On Weakening Demand And Parent's Liquidity Pressure; 'BB' Rating Affirmed

We expect compact construction equipment manufacturer Doosan Bobcat Inc. (Bobcat), which generated stable EBITDA of about US$500 million in the past four years mostly from the U.S. and Europe, to record weaker earnings in 2020 due to the depressed economic environment caused by the COVID-19 outbreak. In our view, parent Doosan Infracore Co. Ltd. (DI) faces a difficult refinancing environment and some liquidity pressure, given the group's high leverage and heavy reliance on short-term debt. We are therefore revising our outlook on Bobcat to negative from stable, while affirming our 'BB' long-term issuer credit rating on the company and 'BBB-' issue rating on its senior secured term loan. The negative outlook on Bobcat reflects our view that the company's overall

...- We expect compact construction equipment manufacturer Doosan Bobcat Inc. (Bobcat), which generated stable EBITDA of about US$500 million in the past four years mostly from the U.S. and Europe, to record weaker earnings in 2020 due to the depressed economic environment caused by the COVID-19 outbreak. - In our view, parent Doosan Infracore Co. Ltd. (DI) faces a difficult refinancing environment and some liquidity pressure, given the group's high leverage and heavy reliance on short-term debt. - We are therefore revising our outlook on Bobcat to negative from stable, while affirming our '##' long-term issuer credit rating on the company and '###-' issue rating on its senior secured term loan. - The negative outlook on Bobcat reflects our view that the company's overall credit profile will be under pressure in the next six to 12 months due to weaker earnings and liquidity pressure on the parent group, while the full effects of the COVID-19 pandemic remain highly uncertain....

Research Update