Moody's rates Wienerberger perpetuals Ba1

Moody's Investors Service said it assigned a provisional Ba1 rating to Wienerberger AG's proposed issuance of subordinated perpetual securities and affirmed the company's Baa2 senior unsecured debt rating.

The outlook is stable.

The agency said the Ba1 rating reflects the deep subordination of the perpetual securities relative to other debt obligations of Wienerberger. In particular, the bonds will be the most junior debt obligations of the issuer and subordinated to and ranking behind the claims of all other unsubordinated and subordinated creditors.

The affirmation of the company's rating is backed by its continuous growth, solid profitability and solid business profile, which Moody's said benefits from Wienerberger's strong geographic diversification and leading positions in its major markets.

These positives balance the weakening trend in Wienerberger's credit metrics in the recent past resulting from debt-financed growth activities, the agency said, although the budgeted acquisition and expansion spending for the next few years is expected to be higher than the free cash flow generated in the business.

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