S&P cuts eircom parents

Standard & Poor's said it lowered to B- from B its long-term corporate credit ratings on ERC Ireland Preferred Equity Ltd., ERC Ireland Finance Ltd. and ERC Ireland Holdings Ltd., the parent companies of eircom Group Ltd. (not rated).

At the same time, the ratings were removed from Creditwatch where they had been placed with negative implications on Jan. 19, the agency noted.

The outlook is stable.

In line with the lowering of the corporate credit rating, the issue ratings were also lowered by one notch while the recovery ratings on the outstanding issues remain unchanged, S&P said.

"The rating action primarily reflects its opinion that the group's revenues and EBITDA are more likely to continue to erode than rebound in the next few years, which we think could make the current debt level unsustainable and therefore possibly require some kind of debt restructuring or, later on, hinder the refinancing of outstanding debt," said S&P credit analyst Xavier Buffon.

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