Standard & Poor“s said it will lower its long-term ratings on French glass-maker and building-materials group Compagnie de Saint-Gobain SA to A from A+ if the group“s bid for Meyer International Plc…
Standard & Poor“s said it will lower its long-term ratings on French glass-maker and building-materials group Compagnie de Saint-Gobain SA to A from A+ if the group“s bid for Meyer International Plc goes ahead as planned. The rating on the company“s Netherlands-based guaranteed subsidiary Saint-Gobain Nederland BV, will also fall to A if the transaction is completed, the ratings agency said in a press release. The short-term and commercial-paper credit ratings would remain at A1 and the outlook would stay stable, S&P said. Pending the outcome of the bid, the ratings will remain on CreditWatch with negative implications, it said. The ratings were placed on CreditWatch on 1 February, following the group“s announced bid to acquire 100% of Meyer International, the leading builders“ merchant in the UK, for Euros 1.75 billion, excluding Euros 350 million of debt acquired, the agency said. The above-mentioned transaction would have a marginally positive impact on Saint-Gobain“s business profile by reinforcing its activities in the UK building materials distribution market, S&P said. “However, the resulting enlarged debt burden would significantly undermine Standard & Poor“s expectations, on which the current ratings are based,” it warned. It said the acquisition would drive net debt coverage by funds from operations to about 35% – well below the 40% limit previously anticipated for the current rating category.