Moody's Investors Service on Monday revised its outlook on Paccar Inc. and its main financing arm to "negative" from "stable," citing the challenges it expects the heavy truckmaker to face as a result of the continued downturn in truck demand.
At the same time, the credit ratings agency affirmed its "A1" long-term and "Prime-1" short-term ratings for Paccar Inc. and the financing arm. "A1" is an investment-grade rating four notches below the top triple-A rating.
Moody's said the economic downturn is hurting the asset quality and returns of Paccar's global financial services operations. It expects Paccar's credit metrics to be very weak this year, but to strengthen considerably during 2010 as truck demand stabilizes and the company's cost cuts take effect.
Paccar shares fell 38 cents to $36.80 in afternoon trading.
