Moody's could lift Lafarge

Moody's Investors Service said it placed the Ba1 corporate family rating, the Ba1-PD probability of default rating for Lafarge SA and all Ba1 debt ratings of Lafarge and its rated and guaranteed subsidiary, as well as the provisional Ba1 senior unsecured and provisional Ba2 subordinated rating of its euro medium-term note program, on review for upgrade.

The placement follows the announced merger proposal with Holcim Ltd. (Baa2 negative).

"The review was triggered by Lafarge's announcement of its merger proposal with Holcim which has a stronger balance sheet and credit rating than Lafarge and would lead to an enhancement of Lafarge's credit profile," Falk Frey, Moody's senior vice president and lead analyst for Lafarge, said in a news release.

"In our view the plan, if executed successfully, is credit positive for Lafarge. Whereas we estimate Lafarge's leverage calculated as debt/EBITDA to be at 5.4x in 2013, Holcim's adjusted debt/EBITDA was 3.1x in 2013."

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