S&P downgrades SCA to BBB+

S&P said it lowered its long-term corporate credit rating and issue ratings on Svenska Cellulosa AB SCA (SCA) to BBB+ from A-.

The agency subsequently placed its BBB+/A-2 long- and short-term corporate credit ratings and K-1 Nordic regional scale issuer credit rating on SCA on CreditWatch with negative implications.

The ratings on the company's existing issues are not on CreditWatch.

S&P said the downgrade follows SCA's announcement that it made a firm proposal to acquire BSN Medical Luxembourg Group Holding Sarl for a total consideration of €2.7 billion. The €2.7 billion transaction would be entirely funded with new debt.

The agency assumes that BSN will be integrated with SCA Hygiene, which is currently 100% controlled by SCA. The spin-off of SCA Hygiene from SCA is in progress and is expected to be completed after the shareholders' approval during the second quarter of next year.

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