Processing Magazine

S&P May Downgrade Ecolab Ratings

March 7, 2008
The Associated Press reported recently that Standard & Poor''s Ratings Services said it may downgrade Ecolab Inc.''s ratings, after the food safety and infection prevention products company said it may repurchase some of its shares from Henkel KGaA.

S&P placed Ecolab''s investment grade "A" corporate credit and senior unsecured ratings on CreditWatch with negative implications.

On Wednesday, Henkel, a German household products maker, said it will sell off some of its stake in the St. Paul, Minn.-based company.

S&P said Henkel''s stake totals about 29 percent and was valued at more than $3 billion as of Tuesday.

Standard & Poor''s credit analyst Paul Kurias noted that the company "has some cushion in its current credit metrics," but a large buyback would weaken that position.

S&P said the CreditWatch will be resolved based on the buyback''s timing, size and funding.