S&P: Peermont on watch

Standard & Poor's said it placed its B long-term corporate credit and senior secured debt ratings on Peermont Global (Proprietary) Ltd. on Creditwatch with negative implications.

The recovery rating on the senior secured debt is unchanged at 3.

"The Creditwatch placement reflects its view of the risks from Peermont's rising derivative liabilities as a result of the effect of recent South African rand appreciation on the negative fair values of Peermont's foreign exchange hedges," said S&P credit analyst Philip Temme.

"The Creditwatch placement also reflects Peermont's higher hedge-adjusted leverage as a result of the appreciation of the rand and Peermont's negative earnings growth in 2009, as well as the prospective impact on the company's liquidity position of potentially material cash outflows when its existing foreign-exchange hedges mature in April 2011."

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