Degussa CEO sees credit rating cut post-RAG

FRANKFURT (Reuters) - The credit rating of Germany's Degussa DGXG.DE is likely to fall when mining and energy group RAG RUHR.UL completes its takeover of the specialty chemicals group, Degussa's Chief Executive Utz-Hellmuth Felcht told the Reuters Chemicals Summit.

"Probably our rating will go down, and probably some of our credit lines will be adjusted," Felcht said on Wednesday.

"We've always had a target of investment grade ... I don't know about the new entity, but the target should always be investment grade shouldn't it?" Felcht added.

Degussa is currently rated BBB by Standard & Poor's, the second-lowest rung of investment grade. RAG does not currently have a credit rating, although Felcht said it was likely to seek one when listed.

Mining and energy group RAG, which owned 50.1 percent of Degussa, announced last year it was buying E.ON's EONG.DE 42 percent stake in the company for 2.8 billion euros.

It launched an offer to shareholders at the end of January to buy the outstanding shares and now controls more than 95 percent of the company.

NO NEW BONDS

Degussa does not plan to issue any new bonds, Felcht said.

"Our balance sheet is looking very healthy at the moment," he said at the summit, held at the Reuters office in Frankfurt.  Continued...