S&P revises Eco-Bat to positive

Standard & Poor's said it revised its outlook on U.K.-based lead recycling group Eco-Bat Technologies Ltd. to positive from stable due to a robust fourth-quarter performance on the back of a strong rebound in the price of lead.

At the same time, S&P affirmed its B+ corporate credit rating on Eco-Bat and its B senior unsecured debt rating on related entity Eco - Bat Finance plc, guaranteed by Eco-Bat.

S&P said the lead price has staged a remarkable recovery in the second half of 2003 and in the beginning of 2004 in response to capacity reductions, low inventories, strong demand in Asia, and a weak U.S. dollar.

"In light of the market evolution, the weak performance of Eco-Bat in the first eight months of 2003, and subsequent strong recovery in the past four months, can be attributed to the extreme volatility in the price of lead and lag effects," said S&P credit analyst Tommy Trask. "Furthermore, Standard & Poor's takes some comfort in the fact that Eco-Bat managed to ride out the recent trough in the lead cycle relatively unharmed."

S&P said it is possible that the ratings on Eco-Bat could be upgraded by one notch if stronger cash flows expected in the second half of 2004 are used for debt repayment and reinvestment into the business.

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