S&P may still cut Alliance Boots

Standard & Poor's said Alliance Boots plc's BB- long-term corporate credit and senior unsecured debt ratings remain on CreditWatch with negative implications, where they had originally been placed on March 12.

The CreditWatch placement followed the takeover bid by Kohlberg Kravis Roberts & Co. and Stefano Pessina, the executive deputy chairman of Alliance Boots.

S&P said that although the new financial profile is not yet public, the agency expects the group to be extremely leveraged given the magnitude of the senior facilities package raised to finance the acquisition. S&P said it estimates the adjusted debt-to-EBITDA ratio to be close to 10 times.

The ratings continue to reflect Alliance Boot's satisfactory business profile, but will be driven primarily by the group's extremely aggressive financial profile, the agency said.

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