S&P raises Linde’s long-term credit rating

14 April 2008 14:22  [Source: ICIS news]

MUMBAI (ICIS news)--Standard and Poor's (S&P) raised Linde’s long-term corporate credit rating on Monday following the German company's strong operating performance and conservative dividend policy in 2007.

Linde's 2007 performance allowed it to reduce financial debt faster than we previously expected, S&P analyst Tobias Mock said in a statement.

The disposal of its €3.5bn ($5.5bn) debt and its strong performance in the industrial gas and engineering businesses supported its operating cash flows, S&P said.

S&P expected Linde to continue benefiting from strong growth conditions in industrial gases and the €4.4bn order backlog in its engineering business.

Linde would also use its operating cash flow to support its growth aspirations in industrial gases by making capital expenditures-to-sales of about 13%/year, S&P said.

“Therefore, further deleveraging will mainly come from increasing cash flow generation, while financial debt is expected to remain relatively stable,” it added.

The credit rating agency increased the industrial gas compay's long-term corporate rating to "BBB+", while affirming its "A-2" short-term rating.

S&P maintained its stable outlook on Linde on expectations that it would balance its capital expenditures and shareholder payouts, and achieve funds from operations-to-debt of 25%-30%, Mock said.

Linde’s shares were trading 1.07% down at €90.57 on the Xetra platform at 14:22 BST.

($1=€0.64)

By: Aaron Rodrigues
+65 6780 4359

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