S&P ups HeidelbergCement

Standard & Poor's said that it raised the long-term corporate credit rating on HeidelbergCement AG to BB from BB- and affirmed the B short-term rating.

The outlook is positive.

S&P raised the issue ratings on HeidelbergCement's senior bonds to BB from BB-. The recovery rating on the bonds is unchanged at 3, indicating the expectation of meaningful (50%-70%) recovery in the event of a payment default.

The upgrade reflects the view that HeidelbergCement's credit metrics will improve to levels commensurate with a BB rating in 2011 as a result of the group's consistent allocation of cash flow to deleveraging, the agency said.

S&P noted that HeidelbergCement's key U.S. and western European markets are likely to move sideways in 2011, rather than see a meaningful recovery.

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