Abrdn long-term issuer rating downgraded

Ratings agency Moody’s has downgraded the long-term issuer rating of investor Abrdn, due to “idiosyncratic weaknesses in its credit profile”.

The downgrade from A3 status to Baa1 is based on an “uncertain economic and weakened operating environment”, which Moody’s said will “continue to challenge the group's efforts to strengthen its competitive position, return to sustainable organic growth, and reduce its overall cost-to-income ratio”.

Abrdn has been undertaking a number of efforts to restructure its business and address weaknesses, including rationalising investment funds, exiting subscale businesses, and pursuing other initiatives to reduce costs and focus on areas of competitive strength.

Sources suggest that the downgrade will have no practical effect on the company’s infrastructure investment business, which continues to be a core focus of the company.

Having made the downgrade, Moody’s attached a stable outlook to the company, on the basis that it expects Abrdn will “continue to make progress in restructuring its Investments vector, improving its profitability and addressing headwinds related to investment performance”.