DUFF & PHELPS RATES THE BLACK & DECKER CORPORATION'S $1.0 BILLION DEBT ISSUE (SHELF) 'BBB-'
CHICAGO, Feb. 24 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a preliminary rating of BBB-' (Triple-B Minus) to the Black & Decker Corporation's (NYSE: BDK) $1.0 billion shelf registration of debt securities. This rating is identical to our present rating of Black and Decker's senior unsecured debt. Proceeds will be used to refinance outstanding debt in order to extend maturities and lower interest cost. Our rating reflects the progress that Black & Decker has made in steadily reducing financial leverage with proceeds from the sale of equity and nonstrategic assets. Since peaking at yearend 1989 at $4.3 billion following the acquisition of Emhart, fixed obligations have been significantly reduced to $3.0 billion or 74 percent of total capital at Dec. 31, 1992. We expect further debt paydowns from proceeds of nonstrategic asset sales as management continues to view debt reduction as a high strategic priority. However, notwithstanding recent actions to reduce debt, the company remains highly leveraged thereby limiting financial flexibility. Furthermore, the timing and amount of future asset sales and debt paydowns remains uncertain. Our rating is reinforced by the prospects for improved profitability and cash flow following the announcement of restructuring charges related to its unprofitable Dynapert business and downsizing of manufacturing capacity in its European consumer and commercial operations. Black and Decker is a leading multi-national producer of power tools and accessories. A major presence also exists in small appliances with leading shares of the domestic iron and cordless hand vacuum markets. The acquisition of Emhart in 1989 improved Black & Decker's offerings in accessories and created a presence in more profitable high-end plumbing fixtures and door hardware. -0- 2/24/93 /CONTACT: Doris S. Nakamura of Duff & Phelps Credit Rating Co., 312-368-3130/ (BDK)
CO: Black & Decker Corporation ST: Maryland IN: HOU SU: RTG
TM -- NY067 -- 0074 02/24/93 16:28 EST
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|Date:||Feb 24, 1993|
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