We have lowered our base-case expectations for French environmental services group Veolia Environnement S.A. (Veolia) owing to a continued structural and cyclical margin squeeze, despite its plans for massive cost cuts. We anticipate that our adjusted credits metrics for Veolia will improve only marginally in 2013, and we think they're unlikely to recover to levels commensurate with the ratings in 2014 or 2015. We are lowering our long-term rating on Veolia to 'BBB' from 'BBB+' and affirming our 'A-2' short-term rating. The negative outlook reflects the one-in-three possibility of a downgrade of Veolia in the next two years if it fails to improve its profitability and credit metrics. On Nov. 15, 2013, Standard&Poor's Ratings Services lowered its long-term
