S&P lowers Akerys

Standard & Poor's said it lowered Akerys Holdings SA's long-term corporate credit rating to B+ from BB and its €300 million floating-rate notes due 2014 to B from BB-. The recovery rating on the notes remains 5.

The ratings were removed from CreditWatch, where they were placed with negative implications on Feb. 27, and the outlook is stable.

The agency said the downgrade reflects the lack of resilience of the company's business model in a more challenging interest rate environment, weaker-than-expected half-year results, the company's downward revision of its EBIT guidance and the resulting weakening of the credit metrics, which are no longer in line with a BB rating.

The ratings continue to reflect the company's aggressive financial profile and lack of geographic diversity, as well as the property development industry's inherent characteristics of cyclicality, working capital intensity, low barriers to entry and high fragmentation, S&P.

In the agency's view, these negative factors are only partly mitigated by Akerys' relatively prudent risk policies, ongoing focus on cash flows and liquidity and the added benefits derived from ancillary financial services.

For the first half of fiscal 2008, Akerys reported a debt-to-EBITDA ratio of 5.1 times.

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