S&P cuts Ciba's short-term credit rating

12 February 2008 17:16  [Source: ICIS news]

LONDON (ICIS new)--Standard and Poor’s has lowered Ciba Specialty Chemical’s short-term credit rating because it thinks the softer economy will negatively affect the company, the credit organisation said on Tuesday. 

"The negative outlook reflects the risk that, due to weaker economic growth, Ciba could fail to improve its cash flow generation and restore is currently weak balance sheet," Standard and Poor's credit analyst Tobias Mock said.

Ciba has not benefited from strong economic growth over the past four years, growing at only 2% in 2007, below world GDP levels, a statement said.

“Ciba’s profitability has also continued to suffer from its struggling paper-chemicals business, the company’s failure to pass on higher raw-material costs to customers, and intense competition across its product portfolio,” it added.

Ciba’s short term corporate credit rating was dropped to A-3 while its longterm corporate credit rating was kept at BBB.

By: Lucy Craymer
+44 20 8652 3214

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