Westinghouse Air Brake Rtgs Afmd by S&P Re: Acquis.NEW YORK--(BUSINESS WIRE)--Aug. 20, 1998--Standard & Poor's today affirmed its double-'B' corporate credit and bank loan ratings on Westinghouse Air Brake air brake: see brake. air brake Either of two kinds of braking systems. The first, used by trains, trucks, and buses, operates by a piston driven by compressed air from reservoirs connected to brake cylinders (see piston and cylinder). Co. Standard & Poor's also affirmed its single-'B'-plus rating on the company's senior unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. . The outlook is stable. About $100 million of long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. securities and $246.5 million of bank debt is affected. The affirmations follow Westinghouse Air Brake's agreement to purchase for $80 million the Rockwell Railroad Electronics (RRE RRE Red Rock Eater (News Service) RRE Road Race Engineering RRE Remote Roof Easy RRE Residential Real Estate RRE Rise-And-Run-Length Encoding RRE Royal Radar Establishment (Great Britain) ) division of Rockwell Collins Inc., a unit of Rockwell International Inc. RRE will strengthen Westinghouse Air Brake's business profile, although the increased debt level will weaken credit protection measures. RRE designs and manufactures integrated communication control monitoring systems for locomotives and railroad right-of-way applications. RRE provides a good strategic fit by adding complementary lines to Westinghouse Air Brake's existing products, and providing valuable technology in electronic braking and positive train control. Westinghouse Air Brake is the leading domestic manufacturer of braking and control systems, air conditioning, and related equipment for railroad freight cars, locomotives, and passenger transit cars. With Rockwell Railroad, the firm will be able to move faster to achieve its goal of providing complete electronic train systems. The acquisition will increase the firm's debt burden and weaken cash flow protection. However, near term prospects are favorable and should enable the firm to generate sufficient free cash flow for material debt reduction. Near-term, management is expected to curtail acquisition activity while focusing on integrating RRE and strengthening the financial profile. Over the next few years total debt to earnings before interest, taxes, depreciation, and amortization Earnings before interest, taxes, depreciation, and amortization (EBITDA) A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. should range between 3.0 times (x) and 3.5x and funds from operation to total debt should range between 15%-20% acceptable levels for the ratings. OUTLOOK: STABLE A favorable operating outlook and a substantial aftermarket business that reduces cyclical exposure, limits downside risk Downside Risk An estimation of a security's potential to suffer a decline in price if the market conditions turn bad. Notes: You can think of this as an estimate of the amount that you could lose on a stock or other investment. . An aggressive growth strategy and resultant heavy debt usage restricts upside ratings potential, Standard & Poor's said. -- CreditWire CONTACT: Daniel R Di Senso, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , 212/208-1618 Steven F Bauml, New York, 212/208-1624 |
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