Browning-Ferris Indus Outlk to Neg by S&P;Rtgs Afmd

Business Wire, July 2, 1998

NEW YORK--(BUSINESS WIRE)--Browning-Ferris Industries Inc. 02-Jul-98 Sym BFI (S&P) Browning-Ferris Indus Outlk to Neg by S&P;Rtgs Afmd 07-02-98 NY -- Standard & Poor's CreditWire 7/2/98 -- Standard & Poor's today revised its outlook on Browning-Ferris Industries Inc. to negative from stable.

At the same time, Standard & Poor's affirmed its single-'A'-minus senior unsecured and corporate credit ratings, and 'A-2' commercial paper rating on the company.

The outlook revision follows Browning-Ferris' announcement that it has approved an additional $750 million authorization to purchase its common stock, anticipated to be completed by Sept. 30, 1999. That decision reduces financial flexibility, with funds from operations to debt and debt to capital weakening to about 40% and 60% over the next year, respectively, which are subpar measures for the rating.

Browning-Ferris' ratings reflect its position as the second largest U.S. waste services firm and strong cash flow from core solid waste services. Ratings also acknowledge a more aggressive financial policy. The recent sale of operations outside North America will allow the company to focus on its more profitable U.S. business, with opportunities to increase margins and returns. While the solid waste industry is mature and very competitive, earnings prospects are enhanced by the essential nature of its services, improving operating efficiencies, slightly higher volume trends, modest pricing flexibility in some regions of the country, and asset rationalization.

OUTLOOK: NEGATIVE Additional actions to enhance shareholder value or increased acquisition activity would further stretch the balance sheet and could lead to lower ratings, Standard & Poor's said.---CreditWire

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