Moody's might downgrade Holcim

Moody's Investors Service said it placed Holcim Ltd.'s Baa1 long-term issuer and unsecured ratings under review for possible downgrade.

The rating action was prompted by the significant deterioration of Holcim's leverage ratios and operating margins during the course of 2008 and the expectation that these metrics might not improve over the intermediate term despite management's efforts to implement a rigorous cost-cutting program, the agency said.

Moody's nonetheless recognizes that the company should be in a position to generate substantial free cash flow in 2010 when the current high capital expenditure program should subside, and the agency continues to recognize Holcim's good business profile with a well-balanced geographic diversification.

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