S&P rates Gildemeister notes B-

Standard & Poor's said it assigned its B- long-term senior unsecured debt rating to the proposed €175 million senior subordinated bond issued by Gildemeister AG, reflecting the B+ long-term corporate credit rating with stable outlook, which S&P said it would assign to Gildemeister upon the successful placement of the bond.

"The rating on the bond reflects the anticipated credit quality of Gildemeister upon the successful placement of the bond issue," said S&P credit analyst Maria Bissinger. "If the bond is unsuccessful, we would view the credit quality of Gildemeister as weaker, as the company's short- and medium-term refinancing risk would be heightened and its debt maturity structure less balanced."

S&P said the rating on Gildemeister will be constrained by a number of factors, most importantly its very aggressive financial profile and only fair financial flexibility, as well as the cyclical and competitive end-markets the group serves, the high capital intensity, and competitive position, which is weakened by the continued strength of the euro.

S&P said the rating will be supported by the group's leading position in the global machine-tool industry, its broad geographical and customer diversity, its technological and innovation leadership, and strong service business, which is less cyclical and higher margin than the group's other activities.

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