S&P: Amec Foster on positive watch

S&P said it maintained the CreditWatch on the BB+ long-term corporate credit rating on Amec Foster Wheeler plc, but changed the implications to positive from developing.

The rating was originally placed on CreditWatch with developing implications in March.

The CreditWatch status reflects a view that the company's credit metrics should remain in line with the rating through 2019 from a stand-alone perspective despite a proposed merger with Wood Group, S&P said.

This stability also comes after a difficult 2016 and despite prolonged challenging market conditions, the agency noted.

S&P also considers a view that the recommended merger should not affect the rating at this stage because the companies plan to complete the process only by the end of 2017 and because some execution risks exist, particularly relative to anti-trust approvals.

The companies are getting nearer to closing the deal since their respective shareholders approved the link-up in June, the agency noted.

A successful merger could enhance Amec Foster's credit profile and the new group's future leverage could be markedly lower than at Amec Foster's current ratio of about 3.6x as of the end of 2016, S&P said.

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