Fitch lowers Pfleiderer

Fitch Ratings said it downgraded Pfleiderer AG's long-term issuer default rating to B- from B. The rating remains on Rating Watch negative. The agency also said it downgraded its €275 million undated subordinated fixed- to floating-rate capital securities to C from CC and removed them from Rating Watch negative. Its short-term issuer default rating of B has been placed on negative watch. The recovery rating on the capital securities is RR6.

The downgrade reflects increased leverage and an overall stretched financial profile for the rating level, as a result of materially weaker-than-expected 2009 operating profitability and cash generation, Fitch said.

Pfleiderer continues to suffer from subdued demand for its products in combination with high competitive pressure on sales prices, unfavorable foreign exchange trends and cost inflation of main raw materials, the agency said.

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