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Ivex Packaging Rtgs Placed on CreditWatch Pos by S&P.

NEW YORK--(BUSINESS WIRE)--S&P CreditWire 8/4/97--Standard & Standard & Poor's today has placed its ratings on Ivex Packaging Corp. and its unit, IPC Corp., on CreditWatch with positive implications (see list below).

The listing follows the announcement of an initial public offering (IPO) of common stock, estimated in the range of $125 million-$144 million, to be issued and sold by the company, as well as by Acadia Partners L.P. and certain related investors. Management has indicated that it intends to use its share of the proceeds, together with borrowings under a new $475 million credit facility, to retire or refinance all or a portion of its high-cost debt.

The proposed recapitalization could result in a meaningful improvement in cash flow coverage measures and financial flexibility, even though the firm's capital structure will remain strained. Lower interest costs and decreased debt levels could result in funds from operations to total debt in the mid-teens percentage area from around 12%, and earnings before interest, taxes, depreciation, and amortization (EBITDA) could cover interest expense by over 2.5 times (x), compared to about 1.7x now. Moreover, financial flexibility could benefit from an extended maturity schedule, an increase in credit facility availability, and access to equity markets. Thus, this leading manufacturer of oriented polystyrene sheet and film and thermoformed polystyrene packaging products would have additional liquidity to continue to pursue investment opportunities and strengthen its somewhat below average business position.

Successful completion of the IPO could result in a modest upgrade of the corporate credit and long-term ratings. However, ratings on the public issues would be withdrawn if they are redeemed. Standard & Poor's plans to meet with management to review its business and financial strategies.


Corp credit rtg B+

Sr unsecd debt B- IPC Corp.

Corp credit rtg B+

Sub debt B- ---CreditWire

CONTACT: Paul Vastola, New York (1) 212-208-1674

Thomas R Kelly, New York (1) 212-208-1944
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Publication:Business Wire
Date:Aug 4, 1997
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