S&P downgrades Grohe

Standard & Poor's said it lowered to B- from B the long-term corporate credit ratings on Grohe Holding GmbH, the indirect parent company of Grohe AG.

The action follows an accelerated deterioration in market conditions and our revised assumptions that market recovery is unlikely to occur before the end of 2010, according to the agency.

The outlook is stable.

S&P also lowered the senior unsecured debt rating on Grohe's €150 million credit facility to B+ from BB- with 1 recovery rating, its €800 million secured notes to B- from B with 3 recovery rating and its €335 million senior notes to CCC from CCC+ with 6 recovery rating.

"The downgrade reflects our view that Grohe's trading performance will deteriorate further in 2009 than initially anticipated, to a level of adjusted debt to EBITDA of above 7.5%," S&P analyst Sabine Gromer said in a statement.

"The rating action also reflects our opinion that the prospects for market recovery will be delayed, to the end of 2010 at the earliest. It leaves little leeway for Grohe's credit metrics to improve in 2010 as we previously anticipated, including EBITDA to debt of 6.5%," Gromer said.

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