S&P downgrades SPX

Standard & Poor said it lowered its corporate credit and senior secured ratings on SPX Corp. to BB+ from BBB- and affirmed its BB+ senior unsecured debt rating.

The outlook is stable.

S&P said the rating actions reflect S&P's view that SPX's business risk profile has declined to somewhat below average from average pro forma for the divestitures of Bomag, Edwards Systems Technologies, and Kendro (in total, these units had an estimated $1.3 billion in revenues and $210 million of EBITDA in 2004), which more than offsets SPX's debt-reduction plans.

Also factored into the lower business risk assessment is the expectation of some recovery from ongoing operating challenges, which have led to meaningful margin degradation in spite of healthy industrial demand. The challenges include difficult pricing environments for several units, facility consolidation, and other restructuring actions.

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