Friday, January 25, 2002
What's the Buzz?
Card maker's rating on watch
American Greetings Corp.'s corporate debt ratings were put on watch by Standard & Poor's Corp. and may be cut.
The No. 2 greeting card maker — which bought Gibson Greetings Inc. of Amberley Village almost two years ago — has been taking actions to strengthen operations and restructure. But it is being hurt by the recession and the bankruptcy filing this week of Kmart Corp., one of its largest customers, S&P said in a statement.
A cut in debt ratings leads to higher interest costs on a company's debt.
S&P said its ratings anticipated an improvement in fiscal 2003 results, but now it's “uncertain whether American Greetings will be able to accomplish this,” S&P said.
Cleveland-based American Greetings' corporate credit and senior secured debt are rated “BBB-,” the lowest rating still considered investment grade. Its subordinated debt is rated “BB+,” or junk.
The agency will review the ratings after evaluating the company's future operating and financial strategies, S&P said.
— Bloomberg News
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