Standard & Poor?s Rating Services said Wednesday, June 11, that ratings on RBS Participações S.A., including its ?B+? corporate credit rating, have been placed on CreditWatch with negative implications.
S&P said the decision reflects a poor first-quarter performance, which undermines RBS?s ability to honor short-term obligations (12 months) amounting to some 47 million US Dollars. The group?s total debt was 158m USD at the end of March. Tax increases and the absence of any signs of a recovery in the advertising market since the contraction of 2001 have affected the group?s results.
RBS?s consolidated cash position has been depleted in the last few months, according to S&P. It now amounts to some 20m USD, down from 34m USD in December 2002.
To avert a rating cut RBS doesn?t just need a successful solution for its upcoming bank maturities but should also improve EBITDA margins, and that partly depends on a recovery in TV and newspaper advertising, S&P said.