S&P lowers Duerr

Standard & Poor's said it lowered its long-term corporate credit rating on Duerr AG to B from B+ and placed it on CreditWatch with negative implications following the company's disappointing earnings outlook and announcement of a comprehensive restructuring plan at its Paint and Assembly Systems division.

At the same time, the subordinated debt rating on the company's €200 million bond was lowered to CCC+ from B- and placed on CreditWatch with negative implications, the agency said.

S&P said the rating actions and CreditWatch placement also reflect that Duerr will not be able to meet its 2005 financial target of pre-tax earnings in excess of €18.5 million due to a significant shortfall in revenues and earnings at the Paint and Assembly Systems division.

The agency added it will also not be able to meet its target ratio of adjusted net debt to lease-adjusted EBITDA of about 4.0 times in 2005, despite the use of asset disposal proceeds to reduce debt.

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