S&P: K&F on negative watch

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

S&P said the action stems from the company's announcement that it is being acquired by an affiliate of Aurora Capital Group for $1.06 billion in cash. There is potential that the transaction will result in higher debt levels; about $400 million of debt was outstanding on June 30.

K&F is a leading supplier of braking systems - wheels, steel and carbon brakes, and antiskid systems - and fuel tanks to the aerospace industry, with annual revenues about $350 million. The firm is also the leader in the small global commercial and military market for aircraft fuel tanks (15%-20%).

Privately held K&F is jointly owned by Bernard Schwartz, chairman and CEO, and Lehman Brothers Merchant Banking.

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