S&P cuts Evergreen outlook to negative

Standard & Poor's said it revised its outlook on Evergreen International Aviation Inc. to negative from stable.

The agency said it affirmed its B long-term corporate credit rating on the company.

The outlook change reflects Evergreen's weaker-than-expected recent operating performance and the potential for covenant issues if operating performance does not improve over the near to intermediate term, the agency said.

Evergreen's revenues and earnings have fallen below S&P's expectations, which has caused covenant compliance to become fairly tight.

Failure to improve operating performance or address covenant concerns through waiver or amendment would likely result in a downgrade, the agency noted, adding that ratings on Evergreen reflect the company's participation in a cyclical, competitive and capital-intensive industry and its highly leveraged capital structure.

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