S&P downgrades Greek Titan to BB, warns of further cuts

S&P downgrades Greek Titan to BB, warns of further cuts
Published: 05 April 2011

S&P today cut to BB from BB- the long-term corporate credit and issue ratings on Greek cement maker Titan Cement Co SA while keeping intact its B short-term rating.

The service also continued the "negative" watch on the long-term corporate credit and issue ratings, meaning further negative action is possible.

The downgrade follows the same action on the sovereign to which the cement manufacturer is heavily exposed. The Greek market accounted for around 32% of the group’s sales and 28% of its EBITDA in 2010.

The agency believes the reduced credibility of the country and the tough operating environment in Greece would have an overall negative effect on Titan’s business risk profile and performance in 2011, given the challenges Titan faces at other key markets, namely the political uncertainties in northern Africa and the weaknesses in eastern Europe.

A further deterioration in industry conditions in Greece and other markets bringing FFO to debt below 20% and other credit metrics below the current rating levels would trigger a downgrade, S&P added.