S&P rates Anixter's converts BB+

Standard & Poor's rated Anixter International Inc.'s proposed $305 million zero-coupon convertible senior unsecured notes due 2033 at BB+. The outlook is negative.

Proceeds from the proposed issue is expected to be used to repay existing debt.

The company benefits from its global capabilities, despite participating in relatively narrow market segments. Revenues are not expected to significantly improve in the near term, reflecting economic weakness and lower levels of technology spending.

Despite weak industry conditions, Anixter has effectively managed its cost structure and working capital levels, resulting in positive free operating cash flow and debt reductions, S&P said.

S&P rates Cable Design convert B+

Standard & Poors assigned a B+ rating to Cable Design Technologies Corp.'s proposed $110 million subordinated convertible note offering, nd affirmed its BB corporate credit and senior unsecured debt ratings.

But, the outlook was revised to negative from stable, reflecting weakened profitability combined with a modest increase in leverage.

Proceeds from the offering are expected to be used to pay down existing $85 million of bank debt in its entirety and to repurchase stock. Funded debt outstanding will increase by about $20 million - the difference between net proceeds from the note offering and existing debt outstanding.

Debt protection metrics have remained relatively strong because of debt repayment. Total debt-to-EBITDA has ranged from 2.3x to 2.7x over the past four quarters, below recent peak levels of 3.1x at April 2002.

The proposed note offering, however, will increase debt coverage ratios to around 3.3x on a pro forma basis for 12-month cumulative EBITDA, excluding restructuring charges, as of April 30. Debt protection metrics may improve from potential improvements in profitability resulting from cost reductions.

CDT is expected to replace its revolving credit facility with a new one, albeit at a reduced amount. Cash balances were $11 million as of April 30. The primary source of liquidity is its ongoing cash generation from operations, which amounted to $23 million for the nine months ended April 30.

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