On Oct. 24, 2008, Standard&Poor's Ratings Services lowered its long- and short-term corporate credit ratings to 'BB+/B' from 'BBB-/A-3' on Germany-based cement producer HeidelbergCement AG (HC). At the same time, we placed all the ratings on CreditWatch with negative implications. The rating actions reflect our revised forecasts on HC following recent discussions with management. Also incorporated are our beliefs that expected headroom under existing financial covenants will be extremely tight at year-end 2008, a covenant breach at end-June 2009 is a material risk, and credit ratios will remain weak over the next few years. We are also concerned about what we deem HC's lack of adequate measures to tackle the situation, with covenant issues compounding the prospects of
