S&P drops Thomson

Standard & Poor's said it lowered its long-term corporate credit rating and senior unsecured rating on Thomson to BB from BBB-.

The outlook is negative.

All ratings were removed from CreditWatch negative, where they were placed on Feb. 14, following the announcement of the company's 2007 results and outlook for 2008, the agency said, noting that the rating on Thomson's junior subordinated perpetual bond was lowered to B from BB.

S&P said that the downgrade primarily reflects its concerns about the recent margin and revenue trends at Thomson, which have resulted in increasingly aggressive debt measures and lower covenant headroom.

According to the agency, the ratings remain supported by Thomson's diversified customer relationships with media, electronics and telecom groups, which are often supported by medium- or long-term contracts and steady license cash flows.

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