S&P: Paternoster on watch

Standard & Poor’s said it placed the long-term corporate credit and issue ratings on Paternoster Holding III GmbH on CreditWatch with negative implications.

Paternoster is the parent company of Wittur International Holding GmbH, which recently announced its plans to merge with Sematic SpA. Wittur has not yet disclosed the purchase price or how it plans to finance the acquisition.

Following a review of the transaction, the agency said it could affirm Paternoster’s ratings or take a negative rating action.

The outcome will depend on the extent to which the transaction is debt-financed, given the already highly leveraged capital structure, the agency said.

Any revision of the ratings also will depend on whether any material increase in debt burden is sufficiently offset by Wittur’s recently improved operating performance and additional earnings generation potential from Sematic, S&P said.

Wittur’s new liquidity position also will be assessed and affect the ratings, the agency added.

The transaction is expected to improve Wittur’s business diversity, S&P said.

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