Air & Water Technologies Rtgs Put on S&PWatch Neg.NEW YORK--(BUSINESS WIRE)--S&P CreditWire 9/19/97--Standard & Poor's today placed its double-'B'-minus corporate credit and single-'B' subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". ratings of Air & Water Technologies Corp. (AWT (Abstract Windowing Toolkit) A class library from Sun that provides an application framework and graphical user interface (GUI) routines for Java programmers. AWT was the first user interface development system included in the Java Foundation Classes (JFC). ) on CreditWatch with negative implications. The action reflects weaker-than-expected operating performance, which may result in the violation of several covenants with AWT's bankers at Oct. 31. Also, the company's surety has indicated that it will not provide bonding services after Sep. 30 unless Compagnie Generales des Eaux (CGE CGE Computable General Equilibrium CGE Conference des Grandes Ecoles (French) CGE Carrier Grade Edition (COTS Linux platform) CGE Classic Gaming Expo (game) ; AWT's largest shareholder) indemnifies a portion of bond liability. The extent of any adverse impact on credit quality will largely depend on future credit support by CGE (triple-'B'-plus/Stable/'A-2'), which owns 42.5 percent of AWT's shares. CGE is currently in discussions with a committee of AWT's independent directors regarding a possible debt restructuring Debt Restructuring A method used by companies with outstanding debt obligations to alter the terms of the debt agreements in order to achieve some advantage. Notes: or recapitalization transaction. Despite leading positions in water supply and wastewater treatment and air pollution control industries, the firm's financial performance has been deteriorating and is currently poor. This coincides with a highly leveraged capital structure, with a negative equity base. While special charges were the primary reason for sizable operating losses sustained for the nine months ended July 31, highly competitive market conditions and company-specific problems (including the delay of new contract awards and a rise in some costs) were contributing factors. Results were particularly weak at the air pollution unit, Research-Cottrell, which has been adversely affected by continuing delays in issuing new air quality standards by the U.S. Environmental Protection Agency Environmental Protection Agency (EPA), independent agency of the U.S. government, with headquarters in Washington, D.C. It was established in 1970 to reduce and control air and water pollution, noise pollution, and radiation and to ensure the safe handling and and lack of enforcement of existing regulations. As a result, this unit is a candidate for a potential divestiture. The core water business (Professional Services Group and Metcalf & Eddy) has moderately favorable growth prospects, enhanced by opportunities in the privatization privatization: see nationalization. privatization Transfer of government services or assets to the private sector. State-owned assets may be sold to private owners, or statutory restrictions on competition between privately and publicly owned of municipal facilities and outsourcing water management. --CreditWire CONTACT: Roman Szuper, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , 212/208-8856 |
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