Saint-Gobain's Long-Term IDR Affirmed At 'A-' On EC Fine Announcement

Fitch Ratings affirmed Compagnie de Saint-Gobain's long-term issuer default and senior unsecured ratings at 'A-' and short-term IDR at 'F2' following the announcement that the French glassmaker was fined 133.9 mln eur by the European Commission for price fixing.

The ratings agency said its outlook for the long-term IDR is negative.

Fitch said the fine announcement relates to the investigation in the construction glass sector, while another investigation related to automotive glass is ongoing. However, the timing and the size of any potential cash outflow from the latter investigation is presently unknown.

Fitch said it expects that the construction glass fine will represent less than 5 pct of Saint-Gobain's 2007 cash flow from operations, which, overall, is not considered sizeable. However, the negative outlook continues to reflect Fitch's view that the underlying free cash flow margin of 0.9 pct in 2006 is weak for the current ratings.

600450 Saint-Gobain's Long-Term IDR Affirmed At 'A-' On EC Fine Announcement
Date: 1 December 2007
Source: Thomson Financial News Limited 2007

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