Foster's has had its rating downgraded following its takeover of Southcorp. Ratings agency Standard & Poor's has said it is concerned about high debt levels and the high-risk nature of the wine sector.

Foster's rating was lowered by the agency by one notch to 'BBB' yesterday (12 May). S&P warned that it could drop the rating by one more level pending the outcome of the takeover bid. This depends on the company's ability to integrate Southcorp's operations and the pace of recovery of Foster's debt profile after it completed the deal.

Speaking to Australian Financial Review, S&P corporate and infrastructure finance credit analyst Brenda Wardlaw said that the Foster's business was being substantially skewed towards the wine sector with the Southcorp acquisition.

"It's the strength and stability of the cash flows of the brewing business that forms a significant part of the credit analysis," she told the Review.