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~~~~~((#))006008000r-Telecommunications

~~~~~((#))016010000p-Ratings & Rating Changes

S&P raises Getronics corporate credit ratings

NEW YORK: Standard & Poor's Ratings Services said today that it had raised to 'B-' from 'CC' its long-term corporate credit rating on Getronics N.V., after the Dutch information and communications technology group withdrew its revised invitation for Getronics bondholders to tender their subordinated convertible bonds.

In addition, the subordinated debt rating on the company was raised to 'CCC' from 'C'.

All of the ratings on Getronics remain on CreditWatch with developing implications, where they were placed on February 13, 2003.

At February 28, 2003, the group had about EUR655 million in gross debt, including about EUR530 million of subordinated convertible bonds.

Standard & Poor's had viewed the group's February 14, 2003, tender offer as coercive, and acceptance would have been characterized as a default.

"Following the withdrawal of the offer, the risk of Getronics defaulting on its financial obligations prior to March 2004 appears much more limited, since the convertible bonds, which make up the bulk of the group's debt, only carry a 0.25 percent cash coupon," said Standard & Poor's credit analyst Patrice Cochelin.

The group now intends to repay all outstanding bonds in cash at their contractual redemption price upon their respective maturity dates, which will entail cash payments of EUR182 million and EUR339 million in April 2004 and March 2005, respectively.

Standard & Poor's will resolve the CreditWatch status after examining Getronic's underlying business profile, debt refinancing, and liquidity position, as well as the value and timing of any further asset disposals.

"Assuming that debt is cut in line with group's expectations and restructured so as to avoid liquidity issues--in particular concerning the maturity of the convertible bonds--Getronics' long-term rating is likely to remain in the 'B' rating category, in view of the group's shrinking business base," added Mr Cochelin.

If Getronics fails to make significant progress toward meeting its convertible-bond maturities within the next few months, however, the ratings could be lowered again to the 'CCC' or 'CC' category.-Reuters