S&P cuts Linde's rating to A on policy shift

Tuesday, 29. January 2019 19:41

Credit metrics indicated by the financial plan of Linde Plc, parent company established amid a merger with Praxair Inc., prompted S&P Global Ratings to downgrade Linde AG to A from A+. The agency noted on Tuesday that the level is consistent with the unveiled policy, which includes share buybacks worth $6 billion this year and next. The scheme is intended to be funded with cash from asset sales tied to the combination with the company from the United States, while dividends were set at $2 billion.

The ratio of funds from operations (FFO) and debt is seen at the higher end of the range between 35% and 40% in the period, the report adds and reveals projected FFO at "just over $6 billion per year" in adjusted terms, adjusted debt average of $16 billion and free operating cash flow of $3 billion to $3.5 billion per year.

The credit appraiser highlighted the "resilient business" and the dedication to balance growth investments and shareholder returns and to maintain rating at A. It sees sales of $30 billion. The short-term grade was held at A-1.

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