S&P cuts Allegheny Technologies ratings

Standard & Poor's said it lowered its ratings on Pittsburgh-based Allegheny Technologies Inc., including the corporate credit rating to BB from BB+ and the senior unsecured debt to BB- from BB.

The company's ratings remain on CreditWatch, where they were placed on Oct. 23 with negative implications.

S&P said the downgrade follows Allegheny's announcement that it will record a pre-tax special charge in the fourth quarter 2003, totaling up to $205 million. The charges include $65 million to $75 million relating primarily to salaried workforce reductions and asset impairments of certain assets in its flat-rolled products segment, and a non-cash accounting special charge of between $100 million and $130 million for the establishment of a valuation allowance for a portion of its net deferred tax assets.

Moreover, continued weak demand from its key end markets - aerospace and power generation - has significantly affected this high-fixed-cost operation, as well as its high-performance metals segment.

These conditions have more than offset management's efforts to improve its poor credit measures, and likely will persist through to 2005.

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