S&P rates Waterford Wedgwood notes B-

Standard & Poor's assigned its B- debt rating to Waterford Wedgwood plc's proposed contractually subordinated €165 million mezzanine notes and B+ long-term corporate credit rating to the company. The outlook is stable.

The ratings are conditional on the completion of a €38.5 million equity issue, as announced on Nov. 14, which forms part of the group's recapitalization.

"The ratings reflect Waterford Wedgwood's highly leveraged financial profile, as well as the seasonality, cyclicality, and maturity of the niche upmarket tableware markets in which it operates," said S&P credit analyst Hugues de la Presle. "These factors are, however, partially offset by the group's well-established positions, underpinned by strong brands, in its key crystal, ceramics, and premium cookware markets, and by its geographical diversity."

Adjusted for operating leases and €162 million of post tax, post retirement liabilities, net debt pro forma for the recapitalization was about €624 million at Sept. 30.

"It is expected that Waterford Wedgwood should gradually deleverage, thanks to lower operational gearing following the completion of its major restructuring program, and reduced investments and dividends," de la Presle said.

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