S&P puts Levi Strauss on negative watch

Standard & Poor's said it placed its ratings on Levi Strauss & Co., including its B long-term corporate credit and senior unsecured debt and BB- senior secured debt, on CreditWatch with negative implications.

The CreditWatch listing follows Levi Strauss' announcement Thursday that it has adjusted its fiscal 2003 revenue and operating results downward.

S&P said that although this announcement is not expected to adversely affect the company's liquidity position relative to its bank facility, S&P finds the timing of this latest announcement especially troublesome, given the series of controversial events with the company in recent months. This development represents another in a series of challenges for the company as it seeks to execute a turnaround.

S&P said it will closely monitor the company's progress and continue to evaluate the company's relationship with its secured lenders.

S&P said it expects to meet with management shortly to review its business outlook and financial results. Resolution of the CreditWatch listing is expected by Dec. 19. However, any further announcements in the interim period will prompt an immediate review for a downgrade.

Furthermore, any additional surprises or a lack of a prompt resolution of the company's tax audit review will also result in a rating review and/or downgrade.

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