S&P puts Alicorp on watch

S&P said it placed the BBB- long-term issuer credit rating on Alicorp on CreditWatch with negative implications.

The CreditWatch listing follows news that Alicorp acquired Tecnología Aplicada SA, Intradevco's holding company, for a total amount of $490.4 million.

The transaction was 100% debt-financed through a $500 million senior unsecured credit agreement from which Alicorp will use the remaining $10 million for general corporate purposes, S&P said.

The CreditWatch listing reflects the risk that incremental debt used for this acquisition will bring leverage metrics to a level not commensurate with the current BBB- rating on Alicorp, the agency said.

S&P said it will resolve the CreditWatch listing once it has more details on the acquisition and the impact on cash flow generation and leverage.

The agency believes the transaction will strengthen Alicorp's position in the home care division while it enters the personal care division through new categories, the agency said.

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