Alliant Techsystems Rtgs Lowered by S&P;Outlk Stable.NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 11/6/98-- Standard & Poor's today lowered its ratings of Alliant Techsystems Alliant Techsystems NYSE: ATK is a major US aerospace and defense contractor with sales of approximately USD $3.6 billion (fiscal year 2007) [1] and strong positions in propulsion, composite structures, munitions, precision capabilities, and civil and sporting Inc. in response to a tender offer by the firm to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. up to 2.8 million common shares in early December 1998 (see list below). This initiative will increase borrowings by $185 to $215 million while shrinking the equity base accordingly. Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma for the maximum potential dollar amount of share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. , debt-to-total-capital at Sept. 27, 1998 would rise from 47% to 92%, on a modest $41 million equity base. Furthermore, the defense industry is consolidating, and there is potential for debt-financed acquisitions. Nevertheless, an important credit protection measure, funds from operations-to-total-debt, is expected to run in the low-20% area, consistent with the new ratings. The Hopkins, Minn.-based firm's ratings reflect an aggressive financial policy and a relatively narrow base of defense programs. The company has a somewhat below-average competitive position and faces a challenging business environment in an era of tight defense budgets. Alliant manufactures tank, air-to-ground, and infantry ammunition. Related products include ordnance propellants and electronic sensors. The space and strategic systems group manufactures Titan IV The Titan IV family (including the IVA and IVB) of space boosters were used by the US Air Force. They were launched from Cape Canaveral Air Force Station, Florida, and Vandenberg Air Force Base, California. The Titan IV was retired in 2005. and Delta rocket The Delta family of rockets is used in an expendable launch system that has provided space launch capability for the United States since 1960. Delta has a history of over 300 launches, with a 95% success rate. motors, Trident II propulsion Propulsion The process of causing a body to move by exerting a force against it. Propulsion is based on the reaction principle, stated qualitatively in Newton's third law, that for every action there is an equal and opposite reaction. stages, and tactical rocket motors. Fiscal 1998 revenues of $1.1 billion were about 80% U.S. government-derived. Over the intermediate term, tight U.S. defense budgets will constrain con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. sales and earnings growth. Management response is three-fold: pursuit of follow-on and next-generation contracts, focus on cost savings, and acquisitions. In the near-term, Alliant's investment needs for new contracts are manageable, and internal cash flow should benefit from many mature programs and moderate capital expenditure requirements. Although there could be acquisitions, current ratings afford some flexibility to take strategic initiatives while preserving credit quality. OUTLOOK: STABLE Management's aggressive financial philosophy precludes any improvement in credit quality. Steady demand and cash flow generation from existing programs provide support for current ratings. -- CreditWire -0-
RATINGS LOWERED
TO FROM
Corporate credit rating BB- BB
$10 million 11 3/4% senior
subordinated notes B B+
$275 million revolving credit facility BB- BB
Term loan BB- BB
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