The ratings agency said the downgrade concludes its July 26, 2007 review regarding a possible downgrade following the company’s announcement of the intended acquisition announcement. Moody’s added that the one notch downgrade is in line with its previous announcement of a limited downward revision and takes into account the company’s recent track record of successfully integrating larger acquisitions.

It also takes into account Conti’s strong commitment to rapidly reduce debt levels toward its target of 80% to 100% gearing ratio by 2010, down from 158.3% based on preliminary reported figures for full year 2007, Moody’s said. The ‘Prime-2’ short-term ratings were not placed under downward review and remain unchanged.

The outlook also takes into account weakening economic environment and a sober outlook for the automotive industry (particularly in North America, where the company’s exposure has slightly increased as a result of the VDO acquisition), the company’s vulnerability due to reduced North American OE orders, and the potential impact of the weakening US economy upon Europe. (Tyres & Accessories/Staffordshire, U.K.)