S&P puts Dresser on watch

Standard & Poor's announced that it placed the BB- ratings on Dresser Inc. on CreditWatch with negative implications.

The action follows Dresser's announcement that it will most likely be delayed in filing its 10-K before March 31 and that the company could potentially have difficulty providing timely 2004 audited financial statements to its lenders.

Filing delays could result from an ongoing company review concerning a $10 million adjustment to pretax income and a $2.4 million decrease to income-tax expense recorded in fourth-quarter 2003, reported in the company's 2003 10-K.

The company has stated that it will seek waivers from lenders extending filing deadlines and expects that they will be granted. Nevertheless, the CreditWatch listing reflects the potential for ratings to be lowered if the company fails to receive waivers (and thus potentially violate covenants under the company's senior secured credit facility, senior unsecured term loan, and 9.37% senior subordinated notes), or if other potential difficulties arise in the near term that would adversely affect credit quality, S&P said.

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