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UPDATE 1-S&P cuts French group Wendel to 'BB' junk status

Thu, Feb 12 2009, 18:48 GMT
http://www.afxnews.com

PARIS, Feb 12 (Reuters) - Credit rating agency Standard & Poor's cut its rating on French investment company Wendel to 'BB' from 'BB+' on Thursday, although Wendel said the downgrade would not impact its financing.

A rating of 'BB' represents junk status. Wendel had already lost its investment grade status last year, when S&P cut its rating from the 'BBB-' level.

"Wendel takes note of the decision and reiterates that the decision will not have an impact on its financing," said a Wendel spokeswoman.

Wendel has suffered from the global equity market slump since it holds stakes in many listed companies, such as construction group St Gobain and Legrand.

"The downgrade reflects Wendel's lack of significant progress in reducing net debt and subsequently its loan-to-value ratio to within our rating requirements," said Standard & Poor's credit analyst Andreas Kindahl.

Wendel shares closed down 2.4 percent at 32.45 euros, giving it a market capitalisation of around 1.6 billion euros ($2 billion). The stock has fallen around 8 percent since the start of 2009, having dropped 64 percent last year.

(Reporting by Sudip Kar-Gupta; Editing by David Holmes)

($1=.7840 Euro) Keywords: WENDEL/

(sudip.kargupta@reuters.com; +33 1 49 49 52 26; Reuters Messaging:sudip.kargupta.reuters.com@reuters.net)

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