Moody's may lower HeidelbergCement

Moody's Investors Service said it has placed HeidelbergCement's senior implied and all related Ba1 ratings on review for possible downgrade following the announcement of a takeover bid from Spohn Cement GmbH.

Affected Ba1 ratings include its issuer rating and senior unsecured MTN, senior unsecured debt, HeidelbergCement Finance BV's senior debt, senior unsecured MTN and senior notes and HeidelbergCement Financial Services AB's senior debt and notes guaranteed by HeidelbergCement.

Given the limited public information available and the uncertainties surrounding the structure of the takeover bid, the agency said the rating review will focus on the post-transaction capital structure of HeidelbergCement, the strategic intentions of the new owner and the status of the bonds within the new capital structure.

Moody's said it recognizes the improved business fundamentals of the company and would likely confirm the current rating if uncertainties were removed and that there will not be any fundamental change in the financial strategy.

Moody's added the current rating reflects the expectation that profitability will further improve, reduced adjusted indebtedness coupled with increased retained cash flows and a the use of proceeds from a successful rights issue in March to pay down debt.

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