S&P lowers Cegedim notes

Standard & Poor's said it lowered to B+ from BB- its long-term corporate credit rating on Cegedim SA. The outlook is negative.

At the same time, the agency said it lowered its issue rating on Cegedim's €280 million unsecured notes due 2015 to B+ from BB-. The recovery rating on these notes remains unchanged at 3.

S&P said the downgrade primarily reflects a combination of factors that the agency had previously flagged as potential triggers for a negative rating action. Those factors include free cash flow below €40 million and headroom on covenants of less than 15%.

The agency said the downgrade also reflects Cegedim's low headroom under its financial covenants, below the 15% minimum threshold that the agency would consider adequate. Consequently, S&P said it revised its assessment of Cegedim's liquidity to less than adequate.

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