(The following statement was released by the rating agency)
Dec 10 -
-- Luxembourg-registered building products manufacturer Xella International S.A. (Xella) has obtained approval to reset its leverage covenant.
-- Under the amended covenant, we calculate that Xella will have headroom of at least 15%, leading to us to revise upward our assessment of Xella's liquidity position to "adequate" from "less than adequate."
-- We are therefore revising our outlook on Xella to stable from negative, and affirming our 'B+' long-term corporate credit rating on the group.
-- The stable outlook reflects our view that the group will generate positive free operating cash flow in the medium term, despite a difficult operating environment.
On Dec. 10, 2012, Standard & Poor's Ratings Services revised its outlook on Luxembourg-registered building products manufacturer Xella International S.A. (Xella) to stable from negative. At the same time, we affirmed our long-term corporate credit rating on Xella at 'B+'.
In addition, we affirmed our 'B+' issue rating on the EUR300 million senior secured notes issued by Xella's financing vehicle Xefin Lux S.C.A. The recovery rating on the notes is '3', reflecting our expectation of meaningful (50%-70%) recovery in the event of a payment default.