Moody’s ups Italcementi, notes to Ba1

Moody's Investors Service said it upgraded Italcementi SpA's corporate family rating and probability of default rating to Ba1 and Ba1-PD from Ba3 and Ba3-PD, respectively.

The agency also upgraded the company’s medium-term note program rating to provisional Ba1 from provisional Ba3 and Ciments Francais SA's bond rating to Ba1 from Ba2.

The outlook on all ratings is positive.

"The upgrade of Italcementi's ratings to Ba1 follows the takeover of 45% of the shares by HeidelbergCement and HeidelbergCement's tender offer for the remaining 55% of ordinary shares and brings the ratings in line with that of HeidelbergCement (Ba1/positive) which has a stronger credit profile as indicated in our press release as of July 29, 2015 when Italcementi's ratings have been placed under review for upgrade," Falk Frey, Moody’s senior vice president and lead analyst for Italcementi, said in a news release.

“Although, Italcementi's debt holders do not benefit from guarantees from HeidelbergCement, we believe that they are not in a materially weaker position compared to the debt holders of HeidelbergCement despite a somewhat weaker cash generation capability of Italcementi stand alone on a pro forma basis and a somewhat higher leverage at the outset.

“However, Moody's expects that credit metrics will benefit from debt reduction following the expected refinancing of Italcementi's bank debt at the level of HeidelbergCement and the refinancing of the legacy Ciments Francais and ITC bonds over time," Frey added in the release.

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