S&P lowers DAE

Standard & Poor's said it lowered its ratings on DAE Aviation Holdings Inc., including lowering the corporate credit rating to B from B+.

The ratings were placed on CreditWatch with negative implications.

The agency said the actions reflect concerns about the effect the deteriorating business aviation market will have on DAE Aviations' earnings, liquidity and credit protection measures. S&P believes the global economic slowdown and tight credit markets are causing a fairly rapid deterioration in the business aviation market, resulting in fewer hours flown and deferrals and cancellations of orders for new aircraft, reducing demand for the company's maintenance and completion services.

S&P said that although it believes DAE Aviation is in compliance with the financial covenants in its credit facility at the end of 2008, the worsening market outlook and continued profitability problems at the aircraft completions unit are likely to challenge the company's ability to remain in compliance toward the end of 2009.

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