S&P Places Omnicom on ‘CreditWatch’

NEW YORK Standard & Poor’s today placed its long-term ratings for Omnicom Group, including the ‘A-‘ corporate credit rating, on “CreditWatch with negative implications.”
The move comes two days after the holding company reported a rough fourth-quarter in which its net income fell 14 percent to $271 million, or 88 cents a share, from $314 million, or 96 cents a share, a year earlier.
“The CreditWatch placement is based on our view that the company’s leverage will likely rise further beyond our threshold for Omnicom at an ‘A-‘ rating as a result of weak ad demand, and is unlikely to return within our threshold over the next one to two years,” said Standard & Poor’s credit analyst Heather Goodchild in a statement. “We are also concerned about Omnicom’s overall funding flexibility as a result of recent and potential debt puts.”
In addition, S&P affirmed its ‘A-2’ short-term ratings on the company. Omnicom had $3.1 billion of total debt as of Dec. 31, 2008.