Corporate Express, CEX Hldg Unit Put on S&PWatch Neg.NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 11/4/98-- Standard & Poor's today placed its ratingson Corporate Express Inc. and its subsidiary, CEX CEX Consumer Expenditure Survey CEX Computer Exchange CEX Charge Exchange Cex Extrinsic Collector Capacitance (transistors) CEX Crypto Express CEX Currency Exchanger Rate CEX Communication Executive Holdings Inc., on CreditWatch with negative implications (see list below). The CreditWatch placement follows the company's announcement that it is in preliminary discussions with financial sponsors and is considering a 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. or tender for a significant portion of the company's outstanding common shares. With a market capitalization Market Capitalization A measure of a public company's size. Market capitalization is the total dollar value of all outstanding shares. It's calculated by multiplying the number of shares times the current market price. This term is often referred to as market cap. currently above $700 million, the possibility of a significant share repurchase could put stress on the company's already highly leveraged capital structure, and strain cash flow protection. The company's 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. of 4 million shares during the third quarter of 1998 also points to the company's willingness to increase leverage. A further consideration in the CreditWatch placement was the company's announcement that third quarter 1998 results would fall below expectations, due to weakness in the company's delivery business and U.K. office products. Domestically, the company is also experiencing weakness in some sectors of its office products business. Standard & Poor's plans to meet with Corporate Express' management in order to determine the potential for additional leverage to the company's capital structure, and to discuss prospects for the company's core and noncore business units. The new ratings will consider these factors, as well as the company's announced companywide cost reduction initiative and the associated restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. , Standard & Poor's said. - CreditWire -0-
RATINGS PLACED ON CREDITWATCH WITH NEGATIVE IMPLICATIONS
Rating
Corporate Express Inc.
Corporate credit rating BB-
Bank loan rating BB-
Senior unsecured debt rating B
CEX Holdings Inc.
Corporate credit rating BB-
Bank loan rating BB-
Subordinated debt rating B
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