Fitch cuts WPP to BBB

Fitch Ratings said it downgraded WPP Group plc's long-term issuer default rating and senior unsecured rating to BBB from BBB+.

The outlook is now stable.

The downgrade reflects concerns over a protracted consumer-led economic recession and a substantial slowdown in advertising spending that is likely to weaken revenues and operating margins, Fitch said.

This could stretch WPP's average net leverage metrics at a time when the group's balance sheet is already extended, the agency said.

WPP's average net debt-to-EBITDA ratio could peak well above 2x, the agency said.

The ratings also reflect the company's strong market position as the second-largest global advertising holding company and its diverse client base, Fitch said.

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