S&P: Cable & Wireless on watch

Standard & Poor’s said it placed the BB corporate credit rating Cable & Wireless Communications plc on CreditWatch with negative implications.

The CreditWatch listing is based on an expectation for a one-notch downgrade of the company to BB- following the close of the proposed acquisition of Columbus due to the weakening of the company’s financial risk profile as a result of this transaction, S&P said.

Upon close of the transaction, the agency also expects to lower the rating on the senior secured debt at Sable International Finance Ltd. to BB- from BB and lower the rating on unsecured debt at Cable & Wireless International Finance to B from B+.

The downgrades are based on the anticipated increase in the company’s leverage pro forma for the transaction, despite longer-term business benefits, S&P said.

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