S&P says Conti, "unlikely to achieve our debt-protection requirements"

ERJ staff report (DS)

London-- Credit rating agency Standard & Poor's has downgraded Continental AG's credit rating to BB/B -- barely above junk bond status -- on projections of reduced income. The outlook for the company, said S&P, is negative.

In a statement, S&P said, "The downgrade reflects our view that Continental appears unlikely to achieve our debt-protection requirements of funds from operations (FFO) to debt of 25% and debt to EBITDA of less than 3x, which we formulated in September 2008. It also reflects the refinancing risks the company faces in 2010 and the potentially negative impact of Continental's majority ownership by Schaeffler AG."

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Ratings notification from S&P