View all newsletters
Receive our newsletter – data, insights and analysis delivered to you
  1. News
April 10, 2003

UK: Fitch cuts S&N debt rating

Increased leverage from the Kronenbourg acquisition has led the credit rating agency Fitch Ratings to downgraded the senior unsecured debt and short-term ratings of Scottish & Newcastle to BBB and F3 from A-and F2 respectively. The rating outlook was also changed to stable from negative on the UK's largest brewer.

Increased leverage from the Kronenbourg acquisition has led the credit rating agency Fitch Ratings to downgraded the senior unsecured debt and short-term ratings of Scottish & Newcastle to BBB and F3 from A-and F2 respectively.


The rating outlook was also changed to stable from negative on the UK’s largest brewer.
 
“The rating downgrades reflect the significantly increased leverage from the debt-financed Kronenbourg acquisition for 1.5 billion sterling… the group’s negative cashflow given its capex demands going forward and the effect of a larger dividend payment on Scottish & Newcastle’s enlarged equity base,” Fitch said in a statement. It said current debt levels were not expected to decline.


Fitch also pointed at possible increases in pension contributions, which would negatively impact financial ratings. It said it expected the company’s pension deficit to have widened from 188 million sterling in April 2002, as 80% of its assets were held in shares.

Related Companies

Topics in this article:
NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. The top stories of the day delivered to you every weekday. A weekly roundup of the latest news and analysis, sent every Monday. The industry's most comprehensive news and information delivered every quarter.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU

Thank you for subscribing to Just Drinks