TNT's long-term rating lowered to 'BBB+' after continued share buybacks
Standard & Poor’s Ratings Services said it has lowered its long-term corporate credit rating on The Netherlands-based mail group TNT NV to ‘BBB+’ from ‘A-‘, owing to the group’s more aggressive financial policy through continued share buybacks.
S&P said it affirmed the ‘A-2’ short-term rating, adding that the outlook is stable.
‘Although credit protection measures are in the upper range of the new rating category, with adjusted funds from operations to debt, including operating leases and unfunded pensions, of about 35 pct for the 12 months ended June 2007, they are expected to deteriorate slightly over the next few quarters due to the additional share buybacks of 500 mln eur and the company’s willingness to further invest in its network,’ S&P’s credit analyst Eve Greb said.
The ratings agency said the stable outlook reflects its expectation that TNT will complete its existing share-buyback programs, as well as the newly announced additional buyback program for 500 mln eur by mid-year 2008.
