PARIS (Feb. 10, 2003) — Standard & Poor's Rating Services put 10 European companies—including Group Michelin—on CreditWatch after reviewing unfunded post-retirement liabilities at the companies.
Standard & Poor's said its analysis was based on estimates of the value of equity assets in each company's pension fund at year-end 2002. The idea, an analyst said in a statement, is that the post-retirement liabilities are debt-like in nature, especially considering the continuing rise in health care costs and a weakened global economic environment.
Standard & Poor's listed Michelin's rating at BBB+. The company said the ratings can be either affirmed or downgraded based on further discussions with the company, which S&P said should take about two months.
In a statement, Michelin said it acknowledged the rating, but it asserted that the decision is not based on new information from the company. Instead, it reflects a change in S&P's methodology.
The tire maker also said it published in-depth information about its consolidated social liabilities, including post-retirement obligations, in its earnings statement for the first half of 2002. Michelin will release its 2002 earnings on Feb. 25.