Aug 30 - Standard & Poor's Ratings Services said today that its ratings on
E.I. DuPont de Nemours & Co. (A/Stable/A-1) remain unchanged following
DuPont's announcement that it has reached an agreement to sell its performance
coatings business to the Carlyle Group for approximately $4.9 billion in cash.
DuPont intends to use net after-tax proceeds from the transaction, which it
expects to close by the first quarter of 2013, primarily to strengthen its
DuPont's credit measures are currently subpar for the ratings following its
May 2011 acquisition of food ingredient and enzyme producer Danisco A/S for
about $7 billion. As of June 30, 2012, funds from operations-to-net adjusted
debt was 24%, well below our expectation of 35% to 40% at the current ratings.
Notwithstanding the near-term impact of a tepid global economy, we expect
DuPont's credit measures to strengthen to levels commensurate with the ratings
during the next two years, in part as a result of the expected net debt
reduction with the proceeds of this sale. We also expect earnings and cash
flow to improve as a result of favorable conditions in certain key end
markets, such as agriculture and automotive and a continued brisk pace of new
product introductions. We view the sale of the coatings business as a further
positive step in the transformation of DuPont's business mix away from more
cyclical, lower-margin businesses in favor of more stable, higher-margin
businesses, such as Danisco.