S&P: Abbot, Turbo Alpha on watch

Standard & Poor's said it had placed its B- long-term corporate credit ratings on Abbot Group Ltd. and related entity Turbo Alpha Ltd. on Creditwatch with negative implications.

The 3 recovery rating on Turbo Alpha's senior secured bank facility remains unaffected, the agency said.

"The Creditwatch placement reflects the risk of further deterioration in Abbot Group's already highly leveraged credit metrics and its concerns regarding its covenant headroom. It further reflects its view that pressure on Abbot Group's operating profits will continue in 2010-2011, as oil companies continue to seek lower their supply costs," said credit analyst Per Karlsson.

In the agency's credit scenario, it said that it sees a risk that the group's adjusted debt to EBITDA will exceed 7x in 2010-2011 while the other key risk relates to a breach of the group's financial covenants.

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