S&P rates Getronics convertible CCC+

Standard & Poor's assigned a CCC+ rating to the €100 million convertible bond issued by Getronics NV and confirmed its existing ratings including its corporate credit at B. The outlook is stable.

The ratings continue to reflect Getronics' very low profitability in the currently soft IT-services market, as well as the group's leveraged financial profile, S&P said.

These factors are offset, to some extent, by Getronics' strong position in network and desktop-management services, particularly in Europe, and by its solid client base.

Depressed market conditions in most of Getronics' business lines since 2001, ongoing restructuring charges (€42 million were provided for in the first nine months of 2003), and the disposal of profitable business have affected the company's operating performance, causing the EBITDA margin to merely break even in the 12 months to Sept. 30, 2003. Cash restructuring costs and the high coupon on subordinated debt continue to affect Getronics' funds from operations, which were negative in the third quarter of 2003, S&P added.

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