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S&P Downgrades Titan, PPC And MIG


Standard & Poors Ratings Services said that it lowered the long-term corporate credit and issue ratings on Greek heavy materials manufacturer Titan Cement to BB from BB+. The short-term rating is unchanged at B. The long-term corporate credit and issue ratings remain on CreditWatch, where they were originally placed with negative implications on Dec. 7, 2010.

"The downgrade reflects our view that Titans business risk profile, which we assess as fair, has been weakened by its exposure to the declining credit quality of its home market of Greece, while a number of its other core markets are weak or troubled", said S&P in a statement. 

Titan is exposed to North African markets that are currently experiencing political upheaval or conflict, and south eastern European markets that remain depressed, while the CreditWatch negative placement continues to reflect S&P’s view that a further weakening of Greeces credit quality could have negative consequences for the rating on Titan.

Additionally, S&P lowered its long-term corporate credit rating on Greece’s utility Public Power Corp. to BB- from BB+. It also maintained the rating on CreditWatch with negative implications.

As S&P considers PPC to be a government-related entity, it continues to cap PPCs ratings based on the sovereigns credit quality. This is because PPC generates all its earnings domestically and they are regulated, the company is 51% owned by the Greek state, and its liquidity position relies partly on Greek lenders.

Finally, S&P lowered its long-term corporate credit rating on investment-holding company Marfin Investment Group Holdings to B+ from BB. At the same time, it affirmed the short-term corporate rating on Marfin at B. The outlook is negative.

“The rating actions follow our downgrade of Greece on March 29, 2011," said Standard & Poors credit analyst Eric Tanguy. "We believe that the downgrade of the sovereign, together with a challenging economic and financial environment in Greece, will negatively effect MIGs underlying operations as well as the valuations of MIGs holdings”, he added.

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