K&F Industries' Rtgs on S&PWatch Neg, Loral's Afrmd

Business Wire, Sept 16, 1997

NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 9/16/97-- Standard & Poor's ratings of K&F Industries Inc. today were placed on CreditWatch with negative implications (see list below). Ownership interests in the firm will be changed, accompanied by a revision of the capital structure which carries potential for significantly increased borrowings. K&F will repurchase the 22.5% stake held by Loral Space & Communications Ltd. (double-'B'-minus/Developing/-) for $80 million, and also will repurchase several other equity holdings.

Ratings for Loral Space were affirmed and are not on CreditWatch (see list).

As part of this transaction and recapitalization, K&F will repay all existing indebtedness. Funding will be provided by a new senior credit facility and by the issuance of new senior subordinated notes. New York City-based K&F is a leading supplier of braking systems -- wheels, steel and carbon brakes, and anti-skid systems -- and fuel tanks to the aerospace industry. Prospects are good for sustained growth in commercial demand for K&F's braking systems, with about 75% of sales to the replacement market. K&F's cash flow protection measures had been expected to benefit from recent strengthening in industry demand, which should be sustainable, and from management focus on debt reduction. Standard & Poor's will assess the effect of the new capital structure on credit quality. -- CreditWire -0-

RATINGS PLACED ON CREDITWATCH WITH NEGATIVE IMPLICATIONS
K&F Industries Inc.
  Corp credit rtg             BB-
  Sr secd debt                BB-
  Sub debt                    B
  Bank loan rtg               BB

RATINGS AFFIRMED; NOT ON CREDITWATCH
Loral Space & Communications Ltd.
  Corp credit rtg             BB-
  Pfd stk                     B