Moody's may upgrade Rhodia

Moody's Investors Service said it placed Rhodia SA's B1 corporate family rating, B2 senior unsecured rating and B3 senior subordinated rating under review for possible upgrade following improvement in the group's overall profile and deleveraging in the past 12 months.

The agency said Rhodia's performance has demonstrated improved resilience in 2006, supported by continuous demand and ability of the company to transfer increases in raw material prices and improve its margins. In Moody's opinion, this reflects the accomplished reorganization of the portfolio and consolidation of the position in selected core businesses, where Rhodia enjoys sustainable long-term leadership and is likely to maintain its pricing power. At the end of 2006, the total debt-to-EBITDA ratio was 3.6x.

The review will focus on the assessment of FCF generation capacity of the group going forward, the company's development prospects for 2007-2008, the medium-term operating and financial outlook for its key sectors and the company's strategy, the agency said.

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