Fitch Ratings Affs Whirlpool's Nts at 'A-' After Vitromatic Acquisition; Rtg Outlook Neg.Business Editors NEW YORK--(BUSINESS WIRE)--Feb. 25, 2002 Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. affirms the 'A-' ratings on Whirlpool whirlpool, revolving current in an ocean, river, or lake. It may be caused by the configuration of the shore, irregularities in the bottom of the body of water, the meeting of opposing currents or tides, or the action of the wind upon the water. Corp.'s $1.3 billion senior debt and the 'F2' rating on its commercial paper program. The affirmations follow the company's announcement that it has reached an agreement in principle with Vitro, S.A., to acquire Vitro's 51% interest in Vitromatic S.A. de C.V. The Rating Outlook remains Negative reflecting weakened weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. economic
conditions, which could affect the company's operating performance.
The acquisition will give Whirlpool 100% interest in Vitromatic S.A. de C.V., an appliance manufacturing and distribution joint venture in Mexico. The transaction is expected to close during the second quarter and is subject to various regulatory approvals. While terms of the transaction were not disclosed Fitch fitch: see polecat. expects credit measures to remain strong given the company's solid cash flow generation. During 2001 Whirlpool increase cash balances to $316 million and reduced debt by $323 million. As a result, leverage measured by total debt to EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become improved to 1.3x and EBITDA coverage of interest increased to 7.1x. Fitch plans to meet with Whirlpool in the near term to complete a full review of the company's operating plan and long term outlook. The ratings continue to reflect Whirlpool's leading market position as the largest worldwide home appliance manufacturer, its broad geographic diversity, and its strong distribution capabilities. Also considered is the company's sensitivity to changes in consumer spending Consumer demand or consumption is also known as personal consumption expenditure. It is the largest part of aggregate demand or effective demand at the macroeconomic level. as well as the changing patterns of retail distribution. |
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