Moody's rates Fisher convert B1

Moody's assigned a B1 rating to Fisher Scientific Inc.'s new $300 million of 2.5% senior unsecured convertible notes and confirmed its existing ratings including its bank facilities at Ba3, senior notes at B1 and senior subordinated notes at B2. The outlook remains stable.

Moody's cited strong and improving financial performance and the rapidity with which the company is likely to reduce its debt burden.

Improving financial performance, which had been putting upward pressure on the ratings, will offset the assumption of significant new debt and acquisition integration risks, Moody's added.

The outlook reflects Moody's belief that Fisher will continue to grow revenues at a mid- to high single digit rate and that EBITDA will grow at a rate in the low to mid-teens.

Despite the increase in debt, EBITDA/interest should continue to improve, rising to above 4.0x by the end of 2003. In Moody's opinion, Fisher is likely to reduce leverage to levels comparable with existing ones within 12-18 months.

Fitch rates GenCorp notes BB-

Fitch Ratings assigned a BB- rating to GenCorp's proposed $175 million senior subordinated unsecured notes and confirmed the BB rating on GenCorp's bank credit facilities. Fitch cut GenCorp's convertibles to B from B+ based on their position in the capital structure. The outlook remains stable.

Fitch said the ratings reflect GenCorp's improved operating performance and credit statistics that are representative of the rating category. Further support for the ratings comes from the company's position in the favorable defense spending environment, the benefits to be derived from the ARC Propulsion acquisition, a fully funded pension plan as of Nov. 30, 2002, and the additional cash flow and cushion that may be derived from continued development of the company's sizable real estate holdings.

Concerns for the ratings center on a weaker outlook for the automotive industry, low free cash flow, limited liquidity, the impact of the acquisition debt to credit protection measures, potential acquisition integration issues and environmental liabilities, Fitch said.

Moody's rates GenCorp notes B2

Moody's Investors Service assigned a B2 rating to GenCorp Inc.'s proposed $175 million senior subordinated notes due 2013. The outlook is stable.

Moody's said ratings continue to reflect GenCorp's weak financial metrics despite some recent improvement in operating performance of certain business units, expectations for modest near-term free cash flow generation in relation to debt outstanding, and increased leverage resulting from the ARC acquisition which is being financed with the current offering.

Pro forma EBITDA to debt is about 3.4x for the 12 months ending May 2003 and coverage as measured by EBIT to interest is about 3x.

The ratings recognize the business logic and potential operating benefits of the ARC transaction and assume that pending regulatory approvals will be received.

GenCorp's operating income for the 12 months to May 2003 was $70 million, yielding only a 6% return on sales and 4.5% return on assets. In Moody's opinion, opportunities for significant near-term improvement in the company's financial performance may be limited without a material improvement in the economic outlook.

S&P rates GenCorp notes B+

Standard & Poor's assigned a B+ rating to GenCorp Inc.'s proposed $175 million senior subordinated notes due 2013 and confirmed its existing ratings including its senior secured debt at BB+ and subordinated debt at B+. The outlook is stable.

Proceeds from the proposed notes offering will be used to finance the purchase of the propulsion business of Sequa Corp.'s Atlantic Research Corp. for $133 million, with the excess used to reduce bank debt.

The acquisition will weaken GenCorp's credit measures somewhat, but the firm's financial profile will still be appropriate for current ratings, S&P said. In addition, the transaction will improve GenCorp's position in the market for solid propulsion systems for tactical missiles.

The additional debt taken on to finance the acquisition is expected to increase debt to capital to almost 60% from around 51% at the end of May 2003.

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