S&P cuts Manutencoop, loans

Standard & Poor's said it lowered its long-term corporate credit rating on Manutencoop Facility Management SpA (MFM) to B from B+.

The outlook is stable.

At the same time, the agency lowered the issue rating on Manutencoop’s €425 million senior secured notes to B from B+. The recovery rating on the notes is 3, indicating an expectation of meaningful (50%-70%) recovery for lenders in the event of a payment default.

"The downgrade reflects our view that Italy's weak economic and operating environment, marked by increased pricing pressure combined with lower number of signed contracts, will materially weaken MFM's profitability," S&P credit analyst Renato Panichi said in a news release.

"The company has not been able to fully mitigate the impact of the Telecom Italia contract downsize in October 2013, and reported a 6% revenue decline in the first nine months of fiscal 2014. While we previously expected the group to win new contracts to offset the downsize of Telecom Italia, we now expect much lower revenue growth in 2015 and 2016 from new contract wins."

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