Clorox Rtgs Affirmed by S&P; Off CreditWatch.NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 11/3/89 -- Standard & Poor's today 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 single-'A'-plus long-term corporate credit and senior unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. ratings for Clorox Co. and removed them from CreditWatch, where they were placed in October 1998. The affirmation reflects expectations that Clorox's recently announced plan to purchase First Brands Corp. in a stock transaction will only modestly impact financial flexibility. The acquisition could strengthen Clorox's business position by complementing its existing portfolio of well known consumer products with the addition of First Brands' product lines. Also, Clorox's historical record of strong earnings and cash flow from its existing products provides support for the current rating. The 'A-1' short-term corporate credit and commercial paper ratings also were affirmed; these ratings were not previously on CreditWatch. The long-term ratings outlook is stable. The triple-'B'-minus corporate credit, senior unsecured debt, and bank loan ratings for First Brands remain on CreditWatch with positive implications and will be adjusted to reflect Clorox's ratings when the merger is consummated con·sum·mate tr.v. con·sum·mat·ed, con·sum·mat·ing, con·sum·mates 1. a. To bring to completion or fruition; conclude: consummate a business transaction. b. . Ratings for Clorox are based on the company's expanding portfolio of household-related products, stable cash flows, and strong financial profile. The company's growth strategy continues to be focused on acquisitions, most of which complement the company's existing operations, both domestically and in Central or South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. . Profitability continues to be very strong, with gains in manufacturing driving improvements and allowing for increased advertising and international spending. Operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: were 22.8% for the year ended June 1998, up from 21.8% for fiscal 1997. Credit protection measures will weaken modestly from the First Brands' acquisition, reflecting the 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. debt. 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 pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern interest coverage slips to about 6.4 times (x) for the year ending June 1998, down from the mid-8x area for fiscal 1997. 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. to debt should remain in the 40% range, reflecting acquisition activity. Over time, Clorox is expected to maintain credit ratios comfortably within the range of the rating. Cash flow has been well in excess of capital expenditures and dividends, despite the establishment of an international infrastructure. Financial flexibility is ample, allowing the company to restore debt capacity quickly following acquisition activity. OUTLOOK (Clorox Co.): STABLE Despite some modest, near-term erosion in debt protection measures, credit quality is likely remain strong and may recover to historical levels, given the company's good cash flow generation. The current rating incorporates flexibility for Clorox to continue periodic and modest acquisitions to grow its core business domestically and internationally. -- CreditWire |
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