S&P puts Nexans on watch

Standard & Poor's said it placed its BB+ long-term and B short-term corporate credit ratings on Nexans SA, on CreditWatch with negative implications.

The CreditWatch placement follows Nexans' €310 million bid for 100% of Olex, the agency notes, adding that the acquisition, which is expected to close in the short term, will initially increase Nexans' debt levels and weaken debt-protection measures somewhat - possibly to a level below S&P's expectation for the ratings.

The acquisition of Olex will likely be financed through drawing under Nexans' existing credit lines, the agency said, adding that, however, that Nexans' business risk profile could benefit from the acquisition of Olex, as it increases geographic sales diversification in the Asia Pacific region, a strategic growth market for Nexans.

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