S&P may lower Alpha Topco, Formula One

Standard & Poor's said it placed on CreditWatch with negative implications its B+ long-term corporate credit rating on Alpha Topco Ltd.

The agency said it also placed its BB- issue rating on subsidiary Formula One's existing senior secured facilities on CreditWatch negative.

The CreditWatch placement reflects S&P's view that, if Formula One is successful in obtaining existing lenders' consent for requested amendments to its credit facilities and for plans to raise $1 billion through subordinated debt, this will result in significantly and durably higher leverage for the group.

S&P said it now expects gross adjusted leverage to jump to about 14x - or about 6x excluding shareholder loans - at year-end 2012, pro forma for the transaction, versus previous expectations of about 12x.

In addition, the agency said the transaction will add about $93 million of additional interest burden annually, or an increase of about 64% when compared with the current capital structure.

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