Moody's lowers Adecco Baa2

Moody's Investors Service said it has downgraded the Baa2 long-term debt ratings of Adecco SA and its guaranteed subsidiaries following the company's announcement that it plans to make a recommended cash offer for MPS Group Inc. for an enterprise value of €782 million or $13.80 per share.

The company has concurrently launched an offering of CHF 900 million three-year mandatory convertible bonds whose proceeds will be used to finance the transaction along with cash drawdowns, the agency said.

Moody's added that the proposed acquisition is expected to close in the first quarter of 2010.

The outlook is stable.

"The downgrade of Adecco ratings to Baa3 recognizes that the proposed acquisition will weigh on its financial profile already weakened this year by the sharp contraction in profits as the economic downturn has squeezed demand for temporary employees," said Yasmina Serghini-Douvin, an assistant vice president in Moody's corporate finance group.

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