S&P cuts Airborne to distressed

Standard & Poor's said it lowered Airborne Health Inc.'s corporate credit rating to CCC+ from B-. Ratings were removed from CreditWatch, where they were placed with negative implications on Jan. 17, following weaker-than-expected operating performance for the 12 months ended Nov. 30 and expected covenant violation for the quarter ended Jan. 31.

The outlook is developing.

According to S&P, the downgrade follows Airborne's termination of a waiver request for continued access to its $20 million revolving credit facility for a 45-day period, ahead of an anticipated financial covenant default for the quarter ended Jan. 31, 2008, and concerns about the company's future sales volume following recent negative publicity.

At Dec. 31, total leverage was nearly 7 times, up from about 4.5 times at the fiscal year-end April 30, 2007.

Ratings reflect the highly leveraged financial profile, extremely narrow product focus, customer concentration, small size, aggressive financial policy and the segment's vulnerability to adverse publicity, S&P said.

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