Last week, Standard & Poor cuts its credit ratings on French retailer Carrefour following the latter's share buyback announcement, according to the Associated Press.
The ratings agency stated that the buyback of up to 6 per cent of Carrefour's capital, in addition to current cash dividend payouts, could exceed the retailer's free cash flow.
Carrefour's short- and long-term ratings were reduced from A/A-1 to A-/A-2.
Credit analyst Michael Seewald commented: 'The buyback wipes out the financial flexibility Carrefour recently had created following the sale of its stake in Italian retailer Finiper,' which it sold earlier this year.
