S&P cuts PPG ratings on SigmaKalon acquisition

03 January 2008 14:22  [Source: ICIS news]

TORONTO (ICIS news)--Standard & Poor’s (S&P) cut its ratings for PPG Industries on Thursday as it said its $3.2bn (€2.2bn) acquisition of SigmaKalon left the US paint, coatings and chemicals maker with very little financial flexibility.

 

S&P lowered its corporate and senior unsecured debt ratings for PPG to A-, from A, and the commercial paper rating to A-2 from A-1.

 

The rating agency's cuts reflected PPG’s substantial increase in debt to help fund the acquisition - completed this week - of SigmaKalon, a Netherlands-based global producer of architectural, marine, and industrial coatings, S&P said.

 

"While SigmaKalon is a good strategic fit, there is very little flexibility for any negative surprises with regard to the strengthening of credit measures, including the key ratio of funds from operations to total debt," said S&P.

 

($1 = €0.69)

 

By: Stefan Baumgarten
+1 713 525 2653

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