S&P revises outlook on Brunswick

Posted on 27 May 2010

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Standard & Poor's Ratings Services revised its outlook on Brunswick Corp. to positive from stable. Ratings on the company, including the "B-" corporate credit rating, were affirmed.

"The outlook revision is based on our expectation that Brunswick will be able to grow its sales in 2010 and 2011 as it replenishes depleted dealer inventory," Standard & Poor credit analyst Andy Liu said in a statement.

"We estimate that industry retail sales declines will moderate toward mid- to low-teen percentage rates for full-year 2010, from near 20 percent in the first quarter," Liu added. "In the first quarter, Brunswick's sales increased 15 percent versus 2009, as the company increased its shipment of marine engines and boats. Marine engine segment sales increased 30 percent, and boat segment sales increased 19 percent for the quarter year over year."

The "B-" corporate credit rating reflects the sharp decline in Brunswick's profitability because of difficult recreational marine conditions during the last three years and decreased prospects for a substantial industry turnaround in the intermediate term.

Also this week, Moody's Investors Service revised Brunswick's rating outlook to stable from negative.

Comments

1 Thursday, 27 May 2010 16:56

B- is still very deep into the "junk" bond category. Any improvement is a welcome sign, but they still have a very long way to go. I personally would not want to own their debt.

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