S&P downgrades VAC

Standard & Poor's said it lowered the long-term corporate credit rating on VAC Holding GmbH to B- from B and affirmed the B short-term rating. Ratings remain on CreditWatch with negative implications, where they were placed on Sept. 10.

"The rating action is the result of VAC's weaker-than-expected operating and financial performance over the past two quarters, which has lead to a further tightening of headroom under its financial covenants," S&P analyst Anna Stegert said in a statement.

"The CreditWatch status reflects our heightened concerns over the company's ability to comply with financial covenants over the coming quarters given that its performance is likely to be affected by the significantly weaker economic environment, which is expected to persist well into 2009 and potentially beyond."

Adjusted debt-to-EBITDA ratio for the 12 months ended Sept. 30 was about 5.8x.

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