S&P puts Impsa on watch

Standard & Poor's said it placed the B long-term corporate credit rating on Industrias Metalúrgicas Pescarmona Saicyf. on CreditWatch negative.

The watch reflects tougher challenges for the corporate sector in Argentina and weaker overall credit quality given a riskier business environment for companies operating in the country, according to the agency.

Ratings reflect the company's high leverage and its exposure to the inherent volatility of the capital goods industry market and the fluctuations of the economic activity in the main countries where Impsa operates, the agency said.

Ratings also incorporate the significant concentration of the company's backlog in a small number of large-scale projects, the agency added.

Those factors are partially mitigated by an adequate competitive position in the hydropower generation turbines business and some geographic diversification, S&P said.

The debt-to-EBITDA ratio is expected to improve to about 3.5x in fiscal 2009 and beyond, the agency said.

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