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Mark IV Industries $250 Million Senior Subordinated Notes Rated 'BB+' by S&P

5 August 1997

Mark IV Industries $250 Million Senior Subordinated Notes Rated 'BB+' by S&P

    NEW YORK, Aug. 5 -- Standard & Poor's today has assigned its
double-'B'-plus rating to Mark IV Industries Inc.'s $250 million senior
subordinated notes due 2007.  Proceeds from the issue, being sold in
accordance with SEC Rule 144A with registration rights, are being used to
reduce bank debt and for general corporate purposes.
    The company's triple-'B'-minus corporate credit rating and outstanding
double-'B'-plus subordinated debt rating have been affirmed.
    Ratings reflect Amherst, N.Y.-based Mark IV's solid business position as
a leading producer of power transmission, fluid power and transfer, and
filtration products for competitive and cyclical automotive and industrial
markets, and somewhat sub-par, but improving, cash flow protection.
    Following completion of the divestiture of noncore businesses, Mark IV is
undertaking an aggressive growth plan to nearly double sales over the next
four years.  The plan calls for the firm to increase the breadth of product
offerings and to obtain a 50/50 sales split between foreign and domestic
sales.
    A strong aftermarket presence, geographic diversity, and a focus on cost
reduction mitigate earnings and cash flow volatility, and should enable the
firm to fund most of its operating requirements internally.  Some external
funding will likely be necessary to fund potential acquisitions needed to meet
the firm's aggressive growth objectives.  However, increases in debt leverage
should be limited by the balanced use of debt and equity. Debt leverage is
expected to range between 40%-50%.  Funds from operations to total debt,
currently running in the mid-20s percentage range, is expected to gradually
strengthen to a satisfactory 30%-35%.
    OUTLOOK: Stable.
    Upside rating potential over the next two-to-three years is limited by
management's somewhat aggressive financial policy.  A favorable near-term
operating outlook limits downside risk. -- CreditWire

SOURCE  Standard & Poor's CreditWire