S&P lowers Kloeckner

Standard & Poor's said it lowered its long-term corporate credit rating on Kloeckner Pentaplast SA to B- from B.

The outlook is stable.

The agency said that the rating action reflects sustained pressure on Kloeckner's earnings and cash flows caused by high raw material costs and technical problems.

Coupled with its highly leveraged capital structure, this makes Kloeckner's financial position very weak, although S&P said it still expect the group to continue to meet scheduled interest payments and adhere to financial covenants in its loan documentation.

The agency noted that the ratings on Kloeckner continue to reflect its highly leveraged financial profile and exposure to high and volatile raw material prices.

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