HeidelbergCement rises on upgrade for debt - report

HeidelbergCement rises on upgrade for debt - report
Published: 20 December 2012


HeidelbergCement AG jumped the most in more than four months after MainFirst Bank AG analysts predicted the company will regain an investment-grade credit rating next year, according to a report by Bloomberg.

HeidelbergCement rose as much as 5.5 per cent to 46.48 euros, the steepest intraday gain since 3 August and the biggest move today on Germany’s benchmark DAX Index. The stock, which was trading up 5.3 percent at 1:15pm in Frankfurt, has jumped 42 perc ent this year, valuing the company at EUR8.7bn (US$11.6bn).

Debt at the HeidelbergCement is rated Ba1 at Moody’s Investors Service, the highest non-investment grade rating, and an equivalent BB+ at Fitch. The company cut net debt in the third quarter by almost 10 percent, and beat a spending-reduction target by 21 percent, it said on Nov. 8.

 “We forecast the company to reach investment grade rating in 2013 already, without divestments being necessary,” Christian Korth and Tobias Fahrenholz, analysts at Frankfurt-based MainFirst, wrote in research report yesterday.  An investment grade is likely to attract new investors to HeidelbergCement shares, the analysts said.

Source: Bloomberg