A report from the Fitch Ratings states that it maintains E.I. du Pont de Nemours and Company's (DuPont) ratings on rating watch negative.
The negative watch reflects the risk that leverage could be elevated following the DowDuPont merger and through the subsequent spin-off (see DowDuPont merger/spinoff).
Fitch expects funds from operations (FFO) FFO net leverage to be generally less than or equal to 1.5x.
The rating watch will be resolved when Fitch has further clarity on the operating profile and capital structure of the successor to Dupont.
Key rating drivers
DowDuPont merger/spin-off
Fitch placed DuPont's ratings on rating watch negative on Dec 11, 2015, following the announcement of the proposed merger of equals between DuPont and Dow Chemical. The merger is to be a share-based transaction scheduled to close August 31, 2017. The merger is projected to deliver cost synergies of around $3 billion and growth synergies of roughly $1 billion.
Read More: DuPont maintains rating on negative watch: Fitch
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