S&P rates AMF Bowling facility, notes

Standard & Poor's said it assigned its B rating and a recovery rating of 3 to AMF Bowling Worldwide Inc.'s proposed $175 million senior secured credit facility due 2009. In addition, a CCC+ rating was assigned to the proposed $150 million senior subordinated notes due 2010.

At the same time, S&P affirmed its ratings on AMF Bowling, including its corporate credit rating of B, and removed them from CreditWatch.

The outlook is stable.

S&P said the rating actions weigh Code Hennessy & Simmons LLC's acquisition of AMF Bowling for $135 million in cash, the $325 million of proceeds from both the credit facility and subordinated notes, and $250 million from a sale-leaseback transaction. The acquisition is expected to close during the first quarter of 2004.

The ratings reflect the secular decline in bowling and considerable contraction in the demand for bowling products, which could hamper the company's cash flow growth and improvement in key credit ratios over the near term. These factors are only partly offset by AMF Bowling's strong position in the bowling center and equipment industries, a minimal degree of business diversity, and the company's significantly reduced debt burden and amortization requirements.

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