Interpublic may finally complete its escape from the valley of "junk" credit ratings this spring, if a suggestive statement from Standard & Poor's Wednesday is any guide. S&P, which cut IPG to speculative grade back in 2003, said it was placing IPG on "CreditWatch with positive implications," citing higher-than-expected profit margin growth. Here's S&P analyst Chris Valentine:
We plan to resolve the CreditWatch placement in March following discussions with management regarding the company's prospects for organic revenue growth and confirmation regarding its financial policy, as well as a detailed review of the company's most recent 10k report.
An upgrade from the current BB+, the highest speculative grade rating, is not certain. But
Getting all the way back to investment grade with the three major ratings agencies would be a victory for Interpublic CEO Michael Roth. The company recently nominated three new independent directors to its board in what appeared to be a win for activist investor and IPG shareholder Elliott Management.