S&P drops Gundle outlook to negative

Standard & Poor's said it revised its outlook on Gundle/SLT Environmental Inc. to negative from stable.

At the same time, S&P said it affirmed all the ratings, including the B- corporate credit rating, on Gundle.

"The outlook revision reflects Gundle's highly leveraged financial profile and somewhat diminished liquidity profile amid concerns about softening demand in an increasingly uncertain economic environment," said S&P credit analyst Ket Gondha.

"We are concerned that business conditions could weaken beyond earlier expectations, which would erode the company's financial profile and potentially could cause a breach of the financial covenants on the revolving credit facility."

The agency noted that the rating on Gundle reflects the limited scope of the company's operations, the commodity nature of its products, its vulnerability to fluctuating raw material costs, limited liquidity and cushion under covenants, and its highly leveraged financial risk profile.

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