Allied Waste Rtgs Raised by S&P; Outlook Still Pos.NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 11/6/98-- Standard & Poor's today raised its ratings on Allied Waste Industries Inc. and related entity (see list below). The outlook remains positive. The upgrade reflects improved business and financial profiles as a result of recent acquisitions. The action is also based on expectations of increasing earnings and cash flow generation, as well as the continuation of a prudent financial policy. The upgrade recognizes the benefits of the recently completed stock merger with unrated American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Disposal Services Inc. That transaction has strengthened Allied Waste's competitive position by broadening its customer base and geographic diversity, while at the same time improving the firm's fairly highly leveraged capital structure. Ratings reflect Allied Waste's position as the third-largest solid waste management company, relatively reliable cash flows, and anticipation of further improvement in credit protection measures, partly offset by risks associated with an ambitious growth strategy. The firm has operations in 25 states, with annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. revenues of about $1.5 billion. The use of equity has largely restored financial flexibility that should enable the company to remain active in the ongoing industry consolidation. Allied Waste's profitability should be enhanced by a relatively low cost structure, a relatively high degree of integration of collection and disposal services, and incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. margin benefits from market development activities. Funds flow coverage of debt should average 25%-30% and debt to capital 50%-60% in the intermediate term. While the solid waste market is mature and very competitive, earnings prospects are enhanced by the essential nature of services, good operating efficiencies, slightly higher volumes, modest pricing flexibility in some regions of the country, and asset rationalization rationalization, in psychology: see defense mechanism. . Still, a likely economic slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. could temper tem·per n. 1. A state of mind or emotions; mood. 2. A tendency to become easily angry or irritable. 3. An outburst of rage. currently favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. pricing and volume trends. OUTLOOK: POSITIVE Management's high growth goals are expected to be supported by a balanced use of debt and equity. That strategy has the potential to improve the financial profile to a level that could warrant an investment-grade investment-grade Of, relating to, or being a bond suitable for purchase by institutions under the prudent man rule. Investment-grade is restricted to those bonds graded BBB and above by Standard & Poor's and graded Baa3 and above by Moody's. corporate credit rating in the next two to three years. -- CreditWire -0-
RATINGS RAISED
Ratings
To From
Allied Waste Industries Inc.
Corporate credit rating BB+ BB
Senior unsecured debt BB- B+
Allied Waste North America Inc.
Corporate credit rating BB+ BB
Subordinated debt BB- B+
Bank loan rating BBB- BB+
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