ABB Asea Brown Boveri & Entities Put On S&PWatch Neg.LONDON--(BUSINESS WIRE)--Oct. 16, 1998--Standard & Poor's CreditWire 10/16/98 -- Standard & Poor's today placed its long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. ratings on ABB Asea Brown Boveri ABB, formerly Asea Brown Boveri, is a multinational corporation headquartered in Zürich, Switzerland, operating mainly in the power and automation technology areas. ABB is one of the largest engineering companies as well as one of the largest conglomerate companies in the Ltd. and related entities (see list below) on CreditWatch with negative implications. At the same time, Standard & Poor's affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. its 'A-1'-plus short-term corporate credit and commercial paper ratings on the company and related subsidiaries. Standard & Poor's also revised its CreditWatch implications on Elsag Bailey Automation N.V. and Elsag Bailey Financing Trust (guaranteed by Elsag Bailey Process Automation N.V.) to positive from developing. These actions follow yesterday's announcement that ABB n. 1. Among weavers, yarn for the warp. Hence, Noun 1. ABB - an urban hit squad and guerrilla group of the Communist Party in the Philippines; formed in the 1980s plans to acquire a 53% stake in Elsag Bailey Process Automation N.V. from unrated Finmeccanica SpA, and to make a cash tender offer for remaining shares. The total purchase price is expected to be about $2.1 billion, including debt assumption of $600 million. Although the operations of Elsag Bailey offer a good product and geographic fit with ABB's existing industrial operations, and will lower ABB's exposure to power engineering-related activities, the transaction comes at a time when ABB's cash flow from operating activities before changes in working capital has been gradually declining. This reflects the ongoing intense competitiveness of ABB's businesses, particularly relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc power engineering and transportation activities. Although ABB has been successful in offsetting this trend with its effective working capital management, Standard & Poor's believes that the competitive environment could ultimately lead to a weakening weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. of ABB's cash flow protection.
ABB reported a net cash position of $1.6 billion and $1.4 billion funds
from operations Funds From Operations (FFO)Used by real estate and other investment trusts to define the cash flow from trust operations; earnings with depreciation and amortization added back. at year-end 1997. Standard & Poor's will assess the impact of the acquisition on ABB's business strategy and financial profile. The long-term ratings on ABB and related entities may be lowered one notch notch (noch) incisure; an indentation on the edge of a bone or other organ. aortic notch dicrotic n. cardiac notch 1. . In reviewing the ratings on Elsag Bailey, Standard & Poor's will assess the benefits that will result from its ownership by the financially stronger ABB. The single-'A'-plus counterparty Counterparty The other participant, including intermediaries, in a swap or contract. credit and financial strength ratings on Sirius International Insurance Corp. and Scandinavian Reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. Co. Ltd. are unaffected by the transaction, Standard & Poor's said.---CreditWire
OUTSTANDING RATINGS PLACED ON CREDITWATCH WITH NEGATIVE IMPLICATIONS
ABB Asea Brown Boveri Ltd.
ABB Capital B.V.
ABB Finance Inc.
ABB International Finance N.V.
Corporate credit rating AA
Senior unsecured debt AA
ABB Power Insurance Ltd.
Counterparty credit rating AA
Financial strength rating AA
ABB Holdings Inc.
Corporate credit rating AA
6 OUTSTANDING RATINGS AFFIRMED ABB Asea Brown Boveri Ltd.
ABB Capital B.V.
ABB Finance B.V.
ABB Capital (Germany) GmbH
ABB Treasury Centre (USA) Inc.
Short-term corporate credit rating A-1+
Commercial paper A-1+
ABB Treasury Centre Australia Ltd.
Commercial paper A-1+
OUTSTANDING RATINGS REVISED TO CREDITWATCH POSITIVE FROM CREDITWATCH
DEVELOPING
Elsag Bailey Process Automation N.V.
Corporate credit rating BB+
Bank loan rating BB+
Elsag Bailey Financing Trust
Preferred stock BB-
(Gtd: Elsag Bailey Process Automation N.V.)
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