S&P puts GenCorp on negative watch

Standard & Poor's said it placed its ratings, including the BB corporate credit rating, BB+ senior secured bank loan rating and B+ subordinated debt rating, on GenCorp Inc. on CreditWatch with negative implications.

S&P said the CreditWatch placement reflects expectations that problems at GenCorp's GDX Automotive unit and higher pension expense will likely result in a deterioration of the company's financial profile in 2004 to a level subpar for the rating.

Liquidity is expected to be sufficient for operational needs, capital expenditures, and modest near-term debt maturities. At Aug. 31, GenCorp had $61 million in usable cash and $97 million of available borrowings under the company's revolving credit facility. Contingent environmental liabilities, although significant, are expected to be manageable financially due to agreements with government agencies and potential reimbursement from insurers.

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