S&P cuts Wolters Kluwer to BBB+

Standard & Poor's said it has lowered its long-term corporate credit and senior unsecured debt ratings on Netherlands-based publishing company Wolters Kluwer N.V. to BBB+ from A- and the subordinated debt to BBB from BBB+ following a decline in the company's margins.

The outlook is stable.

"The rating action was prompted by Standard & Poor's re-evaluation of Wolters Kluwer's business profile following a period of decline in sales revenues and operating margins," said S&P credit analyst Trevor Pritchard.

On the positive side, the company has announced a strategy to reverse the decline in revenues and erosion in operating margins due to attrition of mature products. The three-year program carries a degree of implementation risk and front-loaded costs, however, and these factors are only partly mitigated by creditor-friendly actions to reduce gross debt, which amounted to about €3 billion at June 30.

Although plans to reinvigorate the company will be implemented over a multi-year timescale, Wolters Kluwer retains leading positions in professional publishing, a high proportion of subscription sales, and good visibility of earnings, the agency said.

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