Fitch: Veolia view to negative

Fitch Ratings said it revised the outlook on Veolia Environnement to negative from stable and affirmed the long-term issuer default rating and senior unsecured rating at BBB+.

The outlook revision reflects a further delay in the forecast for Veolia's leverage reduction to about 4.7x, previously identified as a negative rating guideline, Fitch said.

Despite management's strong commitment to debt reduction in the medium term and the realization of material disposal proceeds in 2012, Fitch said it considers cash flow generation and deleveraging in the next 12 to 18 months to be limited by a combination of still weak economic conditions and operational difficulties.

The agency also said it considers Veolia's funds from operations fixed-charge coverage as relatively weak.

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