S&P: Italcementi notes BB+

Standard & Poor's said it assigned a BB+ rating to the proposed €350 million senior unsecured notes due 2018 to be issued by Italcementi Finance SA, a subsidiary of Italcementi SpA.

These notes will be guaranteed by Italcementi.

The recovery rating on the proposed unsecured notes is 4, indicating 30% to 50% expected recovery in a default.

The rating is in line with the BB+ long-term corporate credit rating on Italcementi, S&P said.

S&P also said it affirmed the BB+ rating on the €750 million senior unsecured notes due 2020 issued by Italcementi Finance and guaranteed by Italcementi.

The recovery rating on this debt instrument also is 4, indicating 30% to 50% expected default recovery.

The agency also said it affirmed the BB+ long-term and B short-term corporate credit ratings on Italcementi.

The agency also affirmed the BB+ rating on the €500 million senior unsecured notes due in 2017 issued by Ciments Français, a consolidated 83%-owned subsidiary of Italcementi. The recovery rating on this debt is 3, indicating 50% to 70% expected default recovery.

The outlook is stable.

The agency said it further revised downward the expectations for the company's operating performance in 2013; nevertheless, S&P said it believes credit metrics will continue to make limited improvements, supported by significant cost actions that management put in place in Italy.

The group's liquidity is considered adequate despite covenant headroom on bank debt, the agency said. This risk is mitigated by the group's strong relationships with its lenders, limited drawings on bank facilities and significant other sources of liquidity, S&P said.

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