26/2012: Standard & Poor's Ratings Services lowers its long-term corporate credit rating on PBG S.A.
The Management Board of PBG S.A. hereby reports that on May 9th 2012 Standard & Poor's Ratings Services lowered its long-term corporate credit rating on PBG S.A., the assignment of which was reported by the Company in Current Report No. 66/2011 of October 28th 2011, from “BB-” to “B+”, with the possibility of further lowering the rating due to tighter liquidity. The rating has also been placed on CreditWatch with negative implications.
S&P is of the opinion that PBG’s liquidity is tightening because of a domestic bond maturing in 2012 and the Company’s dependence on external liquidity sources. S&P’s analysts also anticipate PBG’s continued generation of negative free cash flow. Furthermore, according to S&P, the Company is sensitive to the timing of operating cash flows under ongoing projects and to lenders support in rolling over short-term credit lines and extending additional funds to offset project shortfalls. The CreditWatch placement reflects S&P’s view of the short-term refinancing risks that PBG is currently facing.
In their report, S&P’s analysts indicated that the rating is supported by PBG's leading position in Poland's construction market, which will benefit from a high level of planned investment in infrastructure projects and public facilities over the next few years, as well as solid operating margins and sound capital structure for the rating level. S&P’s analysts also stated that PBG's rating is limited by the Company's exposure to project-related execution risk in the cyclical and competitive construction industry. Furthermore, the rating is constrained by PBG's small size, weak cash flow profile, and limited diversity, especially its lack of geographic presence beyond its domestic market.
Summary of the media release published by Standard & Poor’s Ratings Services is available at: www.standardandpoors.com
Legal basis:
Par. 5.1.26 of the Minister of Finance’s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated February 19th 2009.
Pliki:
Full version of report (.pdf - 82,04 kB)