Moody's may lower Tereos

Moody's Investors Service said it placed under review for possible downgrade the Ba2 corporate family rating of Tereos and the Ba3 senior secured rating of Tereos Europe's €500 million bond issue.

The rating action reflects Moody's concern that Tereos is unlikely to be able to meet the initially set target credit metrics (i.e. retained cash flow to net debt above 10% and gross debt to EBITDA around 3.5x) over the medium term.

More specifically, Moody's said it notes that the company's revised guidance at the time of the H1 2007/2008 results announcement suggested that EBITDA would not reach more than €350 million for FY2007/2008 and that net debt was expected to be around €1.5 billion, which would translate into a leverage figure of around 4.3x on a net debt basis.

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