S&P: Air Products on watch

Standard & Poor's said that its ratings on Air Products and Chemicals Inc., including the A long-term and A-1 short-term corporate credit ratings, remain on CreditWatch with negative implications, where they were placed on Feb. 8, 2010.

The initial CreditWatch placement followed Air Products' announcement that it made an unsolicited, all-cash offer for Airgas at $60 per share. The update follows Air Products' announcement that it increased its offer to $70 per share, S&P said.

The CreditWatch reflects the likelihood of a downgrade of Air Products, given the meaningful deterioration in its financial risk profile if the transaction is completed, the agency said.

The corporate credit and debt issue ratings on Airgas Inc. remain on CreditWatch with developing implications.

Although a largely debt-financed offer weakens the company's capital structure and financial risk profile, the proposed combined company's favorable industry characteristics, stronger business diversity and a credible commitment to debt reduction, S&P said.

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