Moody's puts Harsco's ratings under review
NEW YORK (AP) — Moody's Investors Service on Tuesday placed Harsco Corp.'s ratings under review for a possible downgrade because the rating agency expects that weaker demand in the company's end markets could hurt its earnings potential.
Moody's is putting Harsco's investment-grade "Baa3" senior unsecured rating on review. It also is reviewing its commercial paper rating and ratings on the company's multiple priority shelf filings for possible downgrade. About $850 million in debt is affected.
Harsco, based in Camp Hill, Pa., provides industrial services and engineered products to clients, such as materials handling or granules for asphalt roofing shingles.
It relies heavily on non-residential construction and infrastructure spending, which, in Moody's view, has weak growth prospects in 2013. The company could also suffer as the result of budget constraints on local governments, which could lead to lower spending on infrastructure-related projects.
And any further economic woes in Europe could hamper business as well. Harsco derives about 35 percent of its total sales from Western Europe.
Despite the company's efforts to control costs and improve its capital allocation for projects, the global economic pressures are high, Moody's said. The review will partly focus on assessing Harsco's ability to offset credit risks presented by the ongoing weakness in its end markets with cost control.
Harsco's shares rose 31 cents to $21.59.