Three area firms on S&P

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The New York-based credit-rating agencgy cited the high-yield or junk — bonds of West Milwaukee heavt equipmentmanufacturer , Pick ’n Save owner and Bostonj Store owner South Milwaukee mining equipment manufacturer Bucyrus International was the only area companhy that received an upgrade. S&o said the outlook for Bucyrus is stablr due to its solid operating performancwe and the strong fundamentals of the globalmininv industry. The debt ratingds remained unchanged for fiveother Milwaukee-area companies in the S&P report on corporatr high-yield bonds.
Standard & Poor’s said the “recessionary economy” is causing credit quality to slide for an increasinvg numberof companies. The firm said it has downgradesd the debt of 329 bonde of companies in the firsyt nine monthsof 2008, the most since the same periosd of recession year 2002. More firms are seekingg relieffrom covenants, or requirements, in theie debt agreements, S&P said. However, executivee with the Milwaukee companiese onthe “weakest links” list said they are neithetr at risk of default nor violatingt any covenants.
Bon-Ton’s corporate credit ratingb was loweredfrom “B” to and the company’s senior unsecurex debt was lowered from to “CCC.” Bon-Ton chief financial officer Keith Plowman took solace in the fact that S&lP removed the retailer from “credit watch.” Bon-Ton’s corporatw headquarters is in York, Pa., but the chiefr executive officer, vice chairman and majority of its corporate staff are located in downtown “Am I pleased with it? No,” Plowmabn said of the ratings.
“We would rather the economh would come back and consumers would get more Plowmansaid S&P is more concernexd with the macro economy than Bon-Ton’zs issues. He said the companhy has strong cash flow and excessborrowing capacity. Rexnord’d outlook is negative due to the company’s “highlhy leveraged balance sheet,” that includew more than $500 million of debt related to a 2007dividens payment, S&P said. Nevertheless, S&P said Rexnord’s “solir end-market demand and operatingy leverage will allow the companty to generate freecash flow” that will help reduc e debt.
The company’s proposed initial public which ison hold, would reduce that pressure on the S&P said. Rexnord chief financial officer Todd Adams said the company is infine shape, despitr the S&P designation. “We’re not seeing any adverse developments in termsw of our ability to continue to servicw debt andfund operations,” Adams said. Slight decreases in Roundy’s same-store sales and profit marginescaused S&P to place Roundy’s on a “creditt watch” and lower the rating on the company’s seniotr debt from “B+” to Roundy’s spokeswoman Vivian King said that since Standard & Poor’ s reviewed Roundy’s finances, the companh has decreased its bank debt and other liabilities.
“Roundy’sa continues to be a strong, viabl e and competitive grocery operator and this in no way impactsour operations,” she said.