Get access to everything we publish when you sign up for Outside+.
Brunswick Corporation (NYSE: BC) commented today on the announcement by Standard & Poor’s Rating Services (S&P) that it had lowered its corporate credit rating on Brunswick from BBB- to BB+. Brunswick issued the following statement:
We do not believe today’s announcement by S&P will have any significant effect on Brunswick. Both our strong balance sheet and ability to generate cash provide us with substantial liquidity and serve us well in economic circumstances such as those affecting the United States. We will continue to focus on operating our businesses well in these market conditions.
Brunswick Acceptance Company, our joint venture with a subsidiary of General Electric Capital Corporation that provides dealer floor-plan financing, is unaffected by this announcement. We are, and expect to remain, in compliance with the financial requirements of the joint venture agreement, in spite of the weak market environment. The venture was recently renewed and extended through June 2014.
With regard to our $650 million revolving credit facility, there are no borrowing constraints resulting from the ratings action. We currently do not anticipate any borrowings under the facility for the remainder of 2008. Looking forward, Brunswick anticipates amending the revolving credit agreement to enhance our ability to remain in compliance with the facility’s leverage covenant and to ensure sufficient borrowing capacity if the present U.S. recreational marine market downturn continues into 2009. We also intend to refinance our $250 million senior unsubordinated floating rate notes due 2009.
We will continue to execute our previously announced plans to resize our company and reduce fixed costs by $300 million. Brunswick expects to generate positive cash flow in 2008 and to end the year with cash in excess of $400 million, up from $267 million at the end of the first quarter of 2008.