* S&P cuts long-term rating to BB+ from BBB-, outlook stable
* Finmeccanica confirms targets, commitment to disposals
* Moody's, Fitch recently stuck to investment grade rating
MILAN, Jan 18 Ratings agency Standard & Poor's
downgraded its rating on Italy's Finmeccanica to junk
on Friday after the state-owned defence group missed its target
for 1 billion euros ($1.3 billion) of asset sales by the end of
S&P cut its long-term corporate credit rating on Italy's
second-biggest industrial group to BB-plus from BBB-minus with a
stable outlook, which reflects expectations of a slight rise in
its 2013 operating profits.
"Given continuing uncertainty regarding the company's
disposal decisions ad their timing, we are now less confident
that Finmeccanica will be able to carry out disposals as
previously planned," S&P said in a statement.
Finmeccanica, burdened by 4.8 billion euros of debt, put on
the block its energy and transportation assets more than one
year ago to avoid credit downgrades that could undermine its
prospects at a time of widespread defence spending cuts.
However, the state-owned conglomerate failed to deliver on
its target of raising 1 billion euros by the end of 2012. It
finalised only the sale of its stake in aviation company Avio
for 260 million euros, sold to GE in December.
S&P is the first rating agency to cut its rating on
Finmeccanica to junk. Moody's and Fitch recently confirmed their
investment grade credit rating.
In a statement that followed the S&P move, Fineccanica said
the cut does not change terms of its outstanding loans and bond
issues, confirming its 2012 targets including for a positive
free cash flow generation.
"Finmeccanica is committed to further deliver on its
restructuring program and to timely execute its disposal plan,"
it said. The company said it has a strong liquidity position and
no significant refinancing needs in the bond market until the
end of 2017.
Finmeccanica has set a Jan. 23 deadline for bidders to
submit offers for its AnsaldoEnergia unit.
S&P said the sale of AnsaldoEnergia that could yield
proceeds of 400-500 million euros would be positive but not
enough to trigger positive rating decision.
The ratings agency said it would consider a positive outlook
or a rating action if Finmeccanica reduces its debt to reach an
adjusted FFO (fund from operations) ratio to debt towards 30
percent from 20 percent seen at end-2012.
Shares of Finmeccanica, which ended flat on Friday, have
risen nearly 20 percent in the last month, helped by positive
broker views and investor optimism over asset disposals.