S&P: Remy Cointreau view negative

Standard & Poor's said it revised to negative from stable the outlook on Remy Cointreau SA and affirmed its BB- long-term corporate credit and debt ratings.

The revision follows the weaker-than-expected operating performance in the important year-end quarter 2008, according to the agency.

Ratings reflect the company's high exposure to the slowing U.S. market and to dollar foreign exchange risk, Moody's said.

Ratings also reflect the group's limited diversification compared with leading peers, despite Remy's leading position in cognac and its presence in other high-margin drink categories, the agency noted.

"The negative outlook reflects our concerns that, despite Rémy's good cash generation capacity and liquidity, a prolonged weakening of Rémy's operating performance could result in pressure on the covenants in the group's loan documentation," S&P analyst Michael Seewald said in a statement.

The agency said it expects Rémy to maintain a net debt-to-EBITDA ratio of about 3.5x.

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