S&P: Deutsche Post on watch

Standard & Poor's said it placed its A long-term and A-1 short-term corporate credit ratings on Deutsche Post AG (DP) and various related entities on CreditWatch with negative implications, owing to the company's interest in acquiring Exel plc.

The CreditWatch placement reflects S&P's view that DP's financial profile could weaken with the potential acquisition of Exel.

The agency said the current ratings are based on the assumption that DP will continue to generate €1.5 billion of free cash flows on average per year and achieve funds from operations to benefit-adjusted net debt of more than 35% per year in the foreseeable future.

Nevertheless, even if the company's currently solid financial profile provides DP with adequate flexibility for moderate acquisitions and expansion investment outlays within the current rating level, the ratings do not factor in any sizable debt-financed acquisitions, S&P noted.

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