Fitch: Kennametal unaffected

Fitch Ratings said its rating on Kennametal's senior unsecured debt remains at BBB- following the company's announcement that it is acquiring Extrude Hone for $137 million. The transaction does not change Kennametal's fundamental credit profile, and the outlook remains positive.

Although the pending acquisition of Extrude Hone is being financed by debt, Fitch said Kennametal's stronger operating results and free cash flow through the first half of fiscal 2005 have met expectations and appear likely to remain strong into 2006.

Fitch said the acquisition will temporarily slow Kennametal's debt reduction and improvement in financial leverage but, given reasonable expectations for consistently strong results, the ratings could be reviewed for a possible upgrade fairly quickly as the Extrude Hone acquisition is absorbed.

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