S&P cuts Manutencoop, notes to B-

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

The ratings remain on CreditWatch with negative implications.

The agency also lowered its issue rating on Manutencoop’s €425 million senior secured notes (outstanding nominal value of €293 million) to B- from B. The issue rating remains on CreditWatch with negative implications. The recovery rating on these notes is unchanged at 3, with recovery prospects in the upper half of the 50%-70% range.

S&P said the downgrade follows Consip SpA's decision to initiate a procedure to determine whether the Italian Competition Authority's (ICA) decision to levy a €48.5 million fine on Manutencoop entitles it to terminate Manutencoop’s current school cleaning contract.

As part of the process, Consip may also decide to exclude Manutencoop from future tender offers within the Italian school cleaning contracts system.

S&P understands that Consip will take a decision within the next 30 days.

The agency believes an extended period of significant uncertainty could have an influence on Manutencoop’s operating environment and could result in contract losses and modest new contract wins.

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