S&P: Bucyrus positive

Standard & Poor's said its B- corporate credit rating on Bucyrus International Inc. remains on CreditWatch with positive implications where it was placed on April 12, pending completion of an initial public offering of common stock with maximum gross proceeds of $155 million and establishment of a new bank facility.

If these transactions are completed as outlined by the company to S&P, including at least $135 million of proceeds from common equity, the corporate credit rating will be raised to BB- from B-, reflecting the improved financial profile upon the repayment of debt. At the same time, S&P said it would assign its BB- rating and recovery rating 3 to Bucyrus International's proposed $150 million credit facility due in six years.

Proceeds from the IPO and new bank facility will be used to repay the company's existing debt in a recap transaction. The IPO and bank transactions are expected to close in the third quarter of 2004.

If the IPO is not completed, then S&P said it would review Bucyrus' prospects for an improved financial profile because of the cyclical upturn in end-markets and assuming that the existing credit facility, which matures in January 2005, will be refinanced. If improvements were judged to be sustainable, a modest upgrade is possible.

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