S&P puts Electrical Components on watch

Standard & Poor's said it placed Electrical Components International Inc.'s B corporate credit rating on CreditWatch with negative implications.

The CreditWatch listing reflects an opinion that the company's end markets, especially residential construction, will remain weak over the next 12 to 18 months and could present a challenge for the company to comply with its leverage covenant as it steps down, S&P said.

Although the agency said it recognizes that the company could use proceeds from receivable finance programs to reduce debt, it believes the risk of deteriorating operating performance and negative free cash flow has increased to the extent that covenant compliance could become difficult in early 2013.

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