02.07.2012 18:48
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Linde AG -- Moody's affirms Linde's A3 ratings; stable outlook

Approximately EUR8.3 billion of debt affected

Frankfurt am Main, July 02, 2012 -- Moody's Investors Service has today affirmed Linde AG's A3 and Prime-2 (P-2) senior debt ratings with a stable outlook following its definitive agreement for the acquisition of Lincare Holdings Inc. (Lincare, not rated).

RATINGS RATIONALE

"The affirmation of Linde's A3 ratings reflects our view that, although the company's acquisition of Lincare would be in itself negative for the issuer's key credit metrics, we would expect these to recover over a 12-24 month horizon and overall remain commensurate with an A3 rating," says Wolfgang Draack, a Moody's Senior Vice President and lead analyst for Linde.

On Monday, 2 July 2012, Linde announced its agreement to acquire Lincare, one of US's largest providers of respiratory services, with revenues of USD1.85 billion in 2011. The offer of USD41.5 per share values Lincare at approximately USD4.6 billion, equivalent to 2.5x 2011 sales and approximately 10.1x EBITDA. Linde plans to fund the acquisition with around two thirds debt and one third common equity. The bid, supported by Lincare's board, is subject to acceptance by the shareholders and customary regulatory approvals and is expected to close already in third quarter 2012.

Moody's considers that the acquisition would be complementary to Linde's existing business portfolio. In the rating agency's view, the acquisition would materially enhance Linde's position in home healthcare, a segment of strategic focus for the company, as well as in North America at a margin comparable to that achieved by Linde in its industrial gas business.

Moody's views the synergy potential of the combination as marginal and the price currently offered in line with valuations for the two European home healthcare acquisitions by Linde in January (Air Products' Continental-European homecare product business) and Air Liquide in June 2012 (LVL Médical Groupe SA, a provider of home healthcare, primarily home-based medical assistance for respiratory diseases in France and Germany). From a rating perspective, the competitive acquisition price, the substantial share of equity financing and Lincare's capacity for cash flow generation offset (1) the sizeable additional debt that would be taken on by Linde as a result of the acquisition; and (2) the challenges expected for Lincare in responding appropriately to the introduction of competitive bidding, Phase II, in the US healthcare system, which from July 2013 is likely to materially cut Medicare reimbursement rates for oxygen equipment and services.

Prior to the offer, Linde's rating was strongly positioned in the A3 rating category. In itself, the transaction will negatively affect key credit metrics debt/EBITDA and retained cash flow (RCF)/net debt in the first full financial year following the closing of the transaction. However, Moody's would expect these metrics to recover quickly in the following year and remain overall within the range the rating agency expects for the current rating, i.e. RCF/net debt in the mid-twenties in percentage terms and leverage, measured in terms of debt/EBITDA, not rising above the 2.5x-3.0x range. Should the bid for Lincare be accepted and the transaction close as currently anticipated, Linde's headroom under the A3 rating will be substantially more limited.

WHAT COULD CHANGE THE RATING UP/DOWN

Upside rating pressure depends on Linde's operating performance and ability to improve profitability and cash flow generation. Upward rating pressure could develop if Linde achieves RCF/net debt of 27%-28% through the cycle and leverage materially below 2.5x debt/EBITDA.

The rating is based on Moody's expectation that Linde will be able to demonstrate stable operating performance and cash flow generation while maintaining a conservative financial policy. An RCF/net debt ratio that is sustained below the mid-twenties in percentage terms and debt/EBITDA rising above the 2.5x-3.0x range would exert downward pressure on the rating. The rating can accommodate a temporary shortfall from these levels, whether this were a result of incomplete consolidation in the first year of cash flows from Lincare, or the period of time needed by Lincare to counter the Medicare reimbursement cuts, although Moody's expects this to be relatively short.

The principal methodology used in these ratings was Global Chemical Industry published in December 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

Linde Aktiengesellschaft, headquartered in Munich, Germany, is an international gases and engineering group with operations in more than 100 countries and approximately 50,000 employees. Linde achieved revenues of EUR13.8 billion in 2011.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

Moody's considers the quality of information available on the rated entities, obligations or credits satisfactory for the purposes of issuing these ratings.

Moody's adopts all necessary measures so that the information it uses in assigning the ratings is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery.

Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history. The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

In addition to the information provided below please find on the ratings tab of the issuer page at www.moodys.com, for each of the ratings covered, Moody's disclosures on the lead rating analyst and the Moody's legal entity that has issued each of the ratings.

Wolfgang Draack Senior Vice President Corporate Finance Group Moody'sDeutschland GmbH An der Welle 5 Frankfurt am Main 60322 Germany JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 Eric de Bodard MD - Corporate Finance Corporate Finance Group JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 Releasing Office: Moody's Deutschland GmbH An der Welle 5 Frankfurt am Main 60322 Germany JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 (C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. ("MIS") AND ITS AFFILIATES ARE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND CREDIT RATINGS AND RESEARCH PUBLICATIONS PUBLISHED BY MOODY'S ("MOODY'S PUBLICATIONS") MAY INCLUDE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY'S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY'S OPINIONS INCLUDED IN MOODY'S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. CREDIT RATINGS AND MOODY'S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY'S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY'S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY'S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY'S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED,DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT.

All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided "AS IS" without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process. Under no circumstances shall MOODY'S have any liability to any person or entity for (a) any loss or damage in whole or in part caused by, resulting from, or relating to, any error negligent or otherwise or other circumstance or contingency within or outside the control of MOODY'S or any of its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct, indirect, special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profits), even if MOODY'S is advised in advance of the possibility of such damages, resulting from the use of or inability to use, any such information. The ratings, financial reporting analysis, projections, and other observations, if any, constituting part of the information contained herein are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities. Each user of the information contained herein must make its own study and evaluation of each security it may consider purchasing, holding or selling.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER.

MIS, a wholly-owned credit rating agency subsidiary of Moody's Corporation ("MCO"), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MIS have, prior to assignment of any rating, agreed to pay to MIS for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS's ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading "Shareholder Relations -- Corporate Governance -- Director and Shareholder Affiliation Policy."

Any publication into Australia of this document is by MOODY'S affiliate, Moody's Investors Service Pty Limited ABN 61 003 399 657, which holds Australian Financial Services License no. 336969. This document is intended to be provided only to "wholesale clients" within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY'S that you are, or are accessing the document as a representative of, a "wholesale client" and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to "retail clients" within the meaning of section 761G of the Corporations Act 2001.

Notwithstanding the foregoing, credit ratings assigned on and after October 1, 2010 by Moody's Japan K.K. ("MJKK") are MJKK's current opinions of the relative future credit risk of entities, credit commitments, or debt or debt-like securities. In such a case, "MIS" in the foregoing statements shall be deemed to be replaced with "MJKK". MJKK is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly owned by Moody's Overseas Holdings Inc., a wholly-owned subsidiary of MCO.

This credit rating is an opinion as to the creditworthiness or a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors. It would be dangerous for retail investors to make any investment decision based on this credit rating. If in doubt you should contact your financial or other professional adviser.

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Analysen zu Linde AG

  • Alle
  • Buy
  • Hold
  • Sell
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20.10.2014Linde HaltenBankhaus Lampe KG
17.10.2014Linde overweightHSBC
15.10.2014Linde NeutralCredit Suisse Group
09.10.2014Linde NeutralUBS AG
01.10.2014Linde NeutralBNP PARIBAS
17.10.2014Linde overweightHSBC
11.09.2014Linde buyDeutsche Bank AG
11.09.2014Linde overweightHSBC
08.09.2014Linde buyCommerzbank AG
01.09.2014Linde OutperformBernstein Research
20.10.2014Linde HaltenBankhaus Lampe KG
15.10.2014Linde NeutralCredit Suisse Group
09.10.2014Linde NeutralUBS AG
01.10.2014Linde NeutralBNP PARIBAS
18.09.2014Linde NeutralNomura
21.08.2014Linde UnderperformCredit Suisse Group
21.08.2014Linde UnderperformCredit Suisse Group
21.08.2014Linde UnderperformCredit Suisse Group
21.08.2014Linde UnderperformCredit Suisse Group
21.08.2014Linde UnderperformCredit Suisse Group
Um die Übersicht zu verbessern, haben Sie die Möglichkeit, die Analysen für Linde AG nach folgenden Kriterien zu filtern.

Alle: Alle Empfehlungen
Buy: Kaufempfehlungen wie z.B. "kaufen" oder "buy"
Hold: Halten-Empfehlungen wie z.B. "halten" oder "neutral"
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