S&P may cut Baxi

Standard & Poor's said that it placed its B+ corporate credit ratings on Baxi Holdings Ltd. on CreditWatch with negative implications, reflecting concerns that the company's near-term credit metrics could be negatively affected by challenging market conditions in some of its key markets.

The agency also placed on negative watch the B- senior secured debt rating on the £100 million mezzanine notes issued by related entity Heating Finance plc and guaranteed by Baxi.

Baxi is witnessing slower demand in some of its key markets, including France, Italy, Germany, Spain and Denmark, which is expected to have a negative impact on profitability and cash generation for reported results for the first half of 2007, S&P said.

Pressure on Baxi's profitability is further exacerbated by higher raw material and component prices, the agency added.

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