- Moody's downgrades senior unsecured debt to A3 from A2
- Loews CFO responds that financial position is `ironclad'
Loews Corp., the holding company led by New York’s Tisch family, was downgraded by Moody’s Investors Service after losses at the Diamond Offshore Drilling Inc. subsidiary.
The senior unsecured rating was dropped to A3 from A2 on “the weakened credit profile of its energy related subsidiaries,” the ratings firm said Wednesday in a statement on New York-based Loews.
Chief Executive Officer Jim Tisch said last month that “chaos continues to reign over the energy market” after a decline in fuel prices pressured the Boardwalk Pipeline Partners LP and Diamond Offshore units. Loews has counted on the growth from its hotel operation and insurance subsidiary, CNA Financial Corp., where Tisch has appointed new leadership.
Loews shares dropped 36 cents to $36.31 at 3:14 p.m. in New York, extending its loss since Dec. 31 to 5.5 percent after declines the two previous years.
Boardwalk and Diamond are the second- and third-biggest contributors to Loews’s revenue, trailing only CNA, according to data compiled by Bloomberg. Oil is trading for less than $40 a barrel, compared with more than $60 in June.
“At Loews, we maintain a fortress balance sheet that lets us withstand whatever economic uncertainty comes our way,” Chief Financial Officer David Edelson said in a statement. “Our parent company cash and investments far exceed our debt, just as they have for more than a decade. Despite the current turbulence in the energy sector, our financial position remains ironclad.”