MUMBAI (Thomson Financial) - Moody's Investors Service downgraded its senior
unsecured ratings on Altadis SA and its guaranteed units, citing the
soon-to-be-completed acquisition of Altadis by Imperial Tobacco Group PLC.
Altadis' was cut to 'Baa3' from 'Baa2' for the senior unsecured long term
ratings and to 'Prime-3' from 'Prime-2' for the short term ratings. All ratings
remain under review for possible downgrade.
"Today's rating action reflects that Altadis credit standing is now going to
be linked to Imperial Tobacco rating," Moody's said.
On the positive side, the agency believes that Altadis standalone cash-flow
to debt ratios are likely to be somewhat stronger than Imperial Tobacco Group.
"However it is not sufficient to warrant a rating for Altadis bonds at a
higher level than Imperial Tobacco Group's bonds," it added.
Moody's believes that Imperial Tobacco will be in a position to upstream
cash-flows from Altadis and can consider changes in the group structure over
time. In addition Imperial Tobacco has not confirmed any intention to provide a
guarantee to Altadis bonds.
"However if Altadis group structure and assets are not materially affected
and if Moody's has sufficient information to monitor Altadis ratings, Moody's
expects the rating of Altadis bonds to remain equal to the rating of Imperial
Tobacco bonds after the conclusion of the current review," Moody's added.
TFN.newsdesk@thomson.com
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