LONDON-Standard & Poor’s said it lowered its long-term ratings on Mannesmann AG from A to BBB, and its short-term ratings from A-1 to A-2, following Mannesmann’s announcement that it has received acceptances in respect to 75 percent of Orange plc’s issued share capital and that its bid for Orange now is unconditional.
Concurrently, Standard & Poor’s raised its long-term corporate credit ratings on Orange to BBB+ from BB+, and raised its senior unsecured debt ratings to BBB from BB-.
The ratings downgrade mainly reflects the company’s higher debt burden following the Orange transaction, and the fact that debt coverage ratios will initially be weakened materially, Standard & Poor’s said.
Mannesmann reported earnings before interest, taxes, depreciation and amortization for the nine months ended Sept. 30 of $1.62 billion, a 71-percent increase from the $946.4 million reported the same time the previous year.
The increase was driven by strong performances in Mannesmann’s key German and Italian markets, the company said.
