Irish Building Materials Group CRH Outlook Revised To Negative On Stretched Credit Metrics; 'BBB+' Ratings Affirmed

Irish building materials group CRH PLC is currently undertaking several large acquisitions, including Ash Grove Cement for $3.5 billion and Florida-based cement plant assets Suwannee for $750 million. This is in addition to nearly €1.34 billion in acquisitions spend made year to date, as disclosed in CRH's trading update call on Nov. 21, 2017. We think that, pro forma these acquisitions and despite the disposal of its U.S. distribution business Allied, rating headroom for CRH will be very low over the next two years, leaving our 'BBB+' long-term rating vulnerable to any potential weakening in market conditions or underperformance against our base-case. We are therefore revising our outlook to negative from stable and affirming our 'BBB+/A-2' ratings on CRH. The

...+ Irish building materials group CRH PLC is currently undertaking several large acquisitions, including Ash Grove Cement for $3.5 billion and Florida-based cement plant assets Suwannee for $750 million. + This is in addition to nearly 1.34 billion in acquisitions spend made year to date, as disclosed in CRH's trading update call on Nov. 21, 2017. + We think that, pro forma these acquisitions and despite the disposal of its U.S. distribution business Allied, rating headroom for CRH will be very low over the next two years, leaving our '###+' long-term rating vulnerable to any potential weakening in market conditions or underperformance against our base-case. + We are therefore revising our outlook to negative from stable and affirming our '###+/A-2' ratings on CRH. + The negative outlook reflects our view that, although CRH should benefit from continued robust demand for its products and exhibit gradually strengthening margins, there will be very little ratings headroom for the group over...

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