S&P cuts American Color Graphics

Standard & Poor's said it lowered its ratings on American Color Graphics Inc., including its corporate credit rating to CCC+ from B and second-priority senior secured rating to CCC from B-. The outlook remains negative.

The rating action follows the company's earnings announcement for the third quarter ended Dec. 31, 2004, in which operating performance continued to deteriorate due to significant volume decreases driven by an intensely competitive pricing environment.

S&P said it does not expect the operating environment to improve meaningfully in the next several quarters.

The ratings reflect the company's weak liquidity position, high debt leverage, intensely competitive market conditions of the overall print industry and the expectation that this trend will continue in the near to intermediate term, S&P said.

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