On March 27, 2009, Standard & Poor's Ratings Services placed its 'BBB+' and 'A-2' long- and short-term corporate credit ratings on Germany-based diversified retailer Metro AG on CreditWatch with negative implications. The CreditWatch placement reflects that the tough economic environment will likely delay Metro's achievement of financial metrics commensurate with a 'BBB+' rating, namely funds from operations (FFO) to debt of 25%, and net debt to EBITDAR (earnings before interest, taxes, depreciation, amortization, and rents) of 2.5x. Although the group reported resilient performance in 2008, disappointing like-for-like sales figures in the fourth quarter indicate softening market conditions, which will slow Metro's improvement of its financial metrics in 2009. These could still be boosted if Metro divests its department store, Kaufhof,...
Companies mentioned in this report are:
- Metro AG
- Metro Finance B.V.
Action: On CreditWatch:Negative
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Product Type: Research Update
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