Moody's ups Solvay view to stable

Moody's Investors Service said changed the outlook to stable from negative on the A2/P-1 senior unsecured debt of Solvay SA and its guaranteed subsidiaries and on the Baa1 subordinated bond issued by Solvay Finance SA and guaranteed on a subordinated basis by Solvay.

The revision in outlook reflects Moody's acknowledgement of the progress made by Solvay over the past 15 months towards deleveraging its balance sheet and repositioning its credit metrics more in line with its A2 rating in the wake of the €1.2 billion acquisition of Fournier completed at the end of July 2005.

The initial recovery in the group's financial profile has been supported by a robust operating performance in parallel with the execution of various corporate actions, the agency said. Solvay's operating profitability and cash flow generation have markedly benefited from a strong increase in the contribution of its pharmaceuticals business, boosted by the addition of Fournier's product portfolio, and from the healthy results posted by its chemicals and plastics divisions.

Moody's said the ratings also acknowledge the challenging prospects for the group's mature and cyclical PVC and chloralkali businesses.

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