Moody's puts Degussa debt on review; downgrade possible

21 December 2005 16:10  [Source: ICIS news]

LONDON (ICIS news)--Moody’s said on Wednesday it had put $2.36bn (Euro1.97bn) of Degussa’s senior unsecured debt under review for a possible downgrade following RAG’s decision to take full control of the specialty chemicals company.

The credit rating agency said it was also concerned that a sale of Degussa’s construction chemicals activities without any debt repayment would affect Degussa’s current Baa1 rating.

Moody’s said it will be looking at how the takeover will affect the relationship between the two companies and the ring fencing arrangements that are currently in place as regards their banking facilities and any profit transfers between them.

It will also look at the impact of the potential disposal of Degussa’s construction chemicals businesses and the underlying cash flow impact.

Moody's said Degussa’s Baa1 rating currently reflects the firm’s position as a leading diversified specialty chemicals group.

By: Nigel Davis
+44 20 8652 3214

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