S&P might lower GKN Holdings

S&P said it placed its BBB- long-term issuer credit rating on GKN Holdings plc and its BBB- issue rating on the company's senior unsecured notes on CreditWatch with negative implications.

GKN faces a hostile takeover bid by Melrose Industries that could increase its debt, while a sale of the auto business as part of GKN's own strategy could weaken its business profile, the agency explained.

S&P said the CreditWatch placement stems from a view that GKN's credit quality could weaken in either of the two scenarios that the company's management and shareholders are considering.

“We aim to resolve the CreditWatch in the next 90 days, depending on how the situation evolves; if the takeover goes ahead, we could lower the ratings by one notch, while an asset disposal could result in a downgrade by up to two notches if the company's financial risk profile does not strengthen in line with the current rating,” the agency said in a news release.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.