S&P rates Fisher convert BB-

Standard & Poor's assigned a BB- rating to Fisher Scientific International Inc.'s $250 million senior unsecured convertible notes due 2023.

The outlook is negative.

The ratings reflect substantial debt burden, which outweighs the benefits of an average business position as a leading distributor of supplies for life science research and clinical laboratories.

Lease-adjusted total debt to EBITDA will increase to 4.5x from 3.4x and funds from operations to total debt will fall to about 16% from 23%. These measures are expected to improve, given Fisher's ability to repay borrowing with ample free cash flow.

Fisher Scientific relies on internal cash generation, a revolving credit agreement and receivables securitization to meet cash needs. Free cash flow is expected to rise to $120 million in 2003, reflecting improving working capital management and limited capital spending needs.

As of March 31, the $175 million revolving credit facility was largely undrawn, while cash balances totaled $44 million. The $225 million receivables securitization special purpose facility, which is consolidated on Fisher Scientific's financial statements, provides funding up to a fixed percentage of receivables and is continuously replenished as receivables are collected.

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