German firms ditch S&P agency
November 22, 2012
Following in the footsteps of German logistics giant Deutsche Post DHL, HeidelCement said Thursday it would cease long-term collaboration with Standard & Poors, but maintain contracts with the two other major US ratings agencies, Moody's and Fitch.
The German construction supplier did not give any specific reason for why it was seeking to cut ties with the agency. However, a spokesperson for the firm said that there were no "commercial considerations" behind the move.
"Collaboration with Moody's and Fitch is running smoothly, which is why we want to continue our contracts with those ratings agencies," the spokesperson added.
HeidelCement is the second German corporation listed in the blue chip DAX stock market index to terminate its contract with Standards & Poors. On Wednesday, Deutsche Post DHL took the same step, saying the decision was made for commercial reasons in the wake of higher prices demanded by the agency for its services.
The German logistics firm also said it would switch over to Fitch ratings agency to have its creditworthiness checked.
The German firms are part of a group of 12 DAX-listed corporations, including Daimler, Siemens, Volkswagen and Bayer, which officially complained about S&P pricing policy in a letter sent to the agency in spring this year.
A spokeswoman for luxury carmaker Daimler told Reuters news agency on Thursday that the company had no plans to cancel its contract with Standard & Poors. Other critics like energy company E.on and chemicals firm Bayer did not want to comment about their policies toward the ratings agency.
The so-called "Big Three" US ratings agencies - Moody's, Fitch and Standard & Poors - are said to control 97 percent of the global ratings market. But they were sharply criticized in the wake of the 2008 financial crisis for having granted sterling ratings to banks and financial products that had collapsed in the crisis.
There are attempts within the European Union and by China to set up their own ratings agency in efforts to offset the US agencies' market dominance.
uhe (dpa, Reuters)