September 13, 2012 / 9:57 PM / 5 years ago

S&P assigns prelim rtgs to Sotheby's rule 415 shelf registratn

Sept 13 (Reuters) - (The following statement was released by the rating
agency)
 NEW YORK (Standard & Poor's) Sept. 13, 2012--Standard & Poor's Ratings Services
said today that it assigned its preliminary 'BB+' senior secured, preliminary
'BB' senior unsecured, and preliminary 'BB-' subordinated debt ratings to New
York City-based Sotheby's unlimited Rule 415 shelf registration for debt
securities. The company has indicated that it will use net proceeds from the
sale of any debt securities for general corporate purposes, including
investments in its business operations, reducing or refinancing existing debt,
or redeeming outstanding securities. The 'BB+' corporate credit rating and
stable outlook on Sotheby's remain unchanged and reflect our assessment that the
company's business risk profile is "fair" and its financial risk profile is
"intermediate." We base our opinion of the company's business risk on its
leading position as one of the two largest auctioneers in the highly volatile
global auction markets and its experienced management team, countered by the
very seasonal nature of its operations and the swings in its profitability. We
view the company's financial risk profile as intermediate given its expected
credit metrics, moderate financial policies, sizable cash balances, and positive
cash flow generation. Lease-adjusted total debt was about $583 million at June
30, 2012. (For the complete corporate credit rating rationale, see the full
analysis on Sotheby's, published on Sept. 4, 2012, on RatingsDirect.) RELATED
CRITERIA AND RESEARCH 2008 Corporate Criteria: Rating Each Issue, April 15, 2008
RATINGS LIST Sotheby's Corporate Credit Rating BB+/Stable/-- New Ratings
Sotheby's Senior Secured BB+(prelim) Senior Unsecured BB(prelim) Subordinated
BB-(prelim)

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