S&P Removes Terex (TEX) from CreditWatch Negative as Zoomlion Talks End

S&P Global Ratings said it affirmed all its ratings on Terex Corp. (NYSE: TEX), including its 'BB' corporate credit rating, and the ratings on its subsidiaries and removed them from CreditWatch with negative implications, where we had placed them on Feb. 24, 2016.

"Although we expect the company to experience continued weakness in operating performance due to softness in key end markets such as energy and mining, we expect it to continue to generate good levels of free cash flow and to maintain leverage below 4x," said S&P Global Ratings credit analyst Tyrell Peebles.

We could lower the ratings if we anticipate a business downturn, acquisitions or shareholder returns to be more aggressive than our expectation, that results in debt-to-EBITDA above 4x on a sustained basis without prospects for near-term improvements.

Ratings upside is not likely over the next 12 months, however, we could raise the ratings if Terex demonstrates a commitment to a more conservative financial policy or it reduces expected volatility. Portfolio expansion into less cyclical end markets, improved and sustainable margin levels and a higher proportion of service revenues could provide greater stability to the business and potentially support an upgrade.

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