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Standard & Poor’s puts F&C Asset Management on negative credit watch

Standard & Poor’s Ratings Services has placed its ‘BBB-/A-3’ long- and short-term counterparty credit ratings on F&C Asset Management PLC on CreditWatch with negative implications.

The ratings agency has also placed the ‘BB’ rating on F&C’s subordinated deferrable under CreditWatch with negative implications.

S&P credit analyst David Tate says: “The CreditWatch placement reflects our view of F&C’s leverage and debt-service metrics, which we understand have been deteriorating over a period of time. In our opinion, these will remain weak, and are likely to fall this year below our 3.5x metric for gross interest coverage by EBITDA.

“Standard & Poor’s aims to resolve the CreditWatch placement in the coming weeks after discussions with the management regarding expectations for an improvement in leverage, debt-service metrics, and fund flow trends now that the extended period of ownership uncertainty has been removed,” added Mr. Tate.

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