Fitch cuts Ideal Standard to CC

Fitch Ratings said it downgraded Ideal Standard International SA's long-term issuer default rating to CC from CCC and affirmed its short-term issuer default rating at C.

Fitch said the downgrade reflects its view that Ideal Standard's capital structure is likely to be restructured as it remains unsustainably leveraged. Coupled with a slower-than-expected recovery in free cash flow (FCF) and bullet maturities in 2018, the group remains substantially exposed to refinancing risks.

Although the gradual recovery of Ideal Standard's end-markets, its multi-year cost savings program and the conversion of the financial structure to PIK support FCF generation and mitigate these risks, the agency expects cumulative FCF to be insufficient to materially reduce leverage before the group's debt maturity in 2018.

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