S&P puts Corus on developing watch

Standard & Poor's said it revised the implications of the CreditWatch status of Corus Group plc's BB long-term corporate credit rating, BB+ senior secured bank loan and BB- senior unsecured debt to developing from positive, reflecting uncertainties regarding the financing structure of the proposed bid for the company by Tata Steel Ltd. (BBB/negative watch).

The positive implications of the CreditWatch status of the company's B short-term corporate credit rating remained unchanged.

The agency said the revision of the CreditWatch status of the long-term ratings reflects uncertainties regarding the financing structure of this proposed transaction and to what extent it could impair Corus' financial profile. The potential ratings upside is still valid and could materialize if the combined entity has a stronger credit quality than Corus on a standalone basis and if there is sufficient evidence that Tata Steel will provide financial support to Corus. However, the ratings might be lowered if Tata Steel pursues an arm's-length approach toward Corus' operations and if the financing of the transaction leads to a deterioration of Corus' financial position.

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