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S&P cuts Applied Extrusion
Standard & Poor's said it lowered its corporate credit rating on Applied Extrusion Technologies Inc. to B- from B and lowered its senior unsecured debt rating to CCC from B-.
The outlook is negative.
S&P said the downgrade reflects Applied Extrusion's extended poor operating and financial performance, weak liquidity position, very aggressive debt leverage, and negative cash flows. The company may be challenged to remain in compliance with minimum EBITDA levels required in its bank credit agreement, should operating profitability fail to improve.
Additionally, the company's ability to make a $15 million semi-annual coupon payment in July 2004 appears uncertain based on current operating trends, the agency said.
S&P said the ratings reflect Applied Extrusion's well below-average financial profile, sub-par operating performance, and vulnerability to raw material cost volatility, which more than outweigh its position as the largest oriented polypropylene films producer in North America. With annual revenues of about $250 million, the company holds an estimated 25% share of the oriented polypropylene market.
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