S&P trims Saipem

S&P said it downgraded Saipem SpA and its senior unsecured notes to BB- from BB and placed them on CreditWatch with negative implications.

“Cost overruns in several key projects have cast a shadow over Saipem's financial position and created uncertainties about its risk-management controls. We lowered the rating on Saipem to reflect our view that higher costs and strongly negative free operating cash flow (FOCF) will continue to weigh on its financial position in the short- to mid-term. We also placed the ratings on CreditWatch with negative implications to signal potential downside risks if the current situation escalates in the coming weeks and months,” S&P said in a press release.

Saipem faces cost overruns of nearly €1 billion across several projects. Cost overruns reported in August led to S&P lowering Saipem’s ratings to BB from BB+

The negative watch indicates the risk of another downgrade in the next few weeks if more bad news is announced, the agency said.

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