HeidelbergCement AG set out plans on Thursday for the existing debt of Britain’s Hanson, which it bought earlier this year, leading the cost of default protection on the two credits to converge.  
 
Crucially,  HeidelbergCement said Hanson would guarantee  HeidelbergCement’s debt until all of Hanson’s dollar bonds, which will remain outstanding, have matured – or until 2016.  
 
Meanwhile, HeidelbergCement will guarantee Hanson’s bonds. It said the end result would be that the two company’s obligations would rank equally. 
 
"Thereby HeidelbergCement will be able to utilise a simpler debt structure appropriate to an investment-grade corporate," the company said. 
 
The plans pushed the cost of insuring Hanson’s debt sharply higher, closer to that of insuring  HeidelbergCement’s debt, and led  Standard & Poor’s to affirm its rating on Heidelberg and Moody’s Investors Service to equalise its ratings on the two companies.