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Speedy Muffler King, Subsidiary Ratings Lowered, on S&P Watch Negative

18 November 1997

Speedy Muffler King, Subsidiary Ratings Lowered, on S&P Watch Negative

    NEW YORK, Nov. 17 -- Standard & Poor's today lowered the
corporate credit rating of Speedy Muffler King Inc. and wholly owned
subsidiary Speedy (USA) Inc. to single-'B' from double-'B'-minus.  Standard &
Poor's also lowered the rating of the US$125 million 10 7/8% senior notes due
2006 issued jointly by Speedy Muffler and Speedy (USA) to single-'B'-minus
from single-'B'-plus.
    The ratings were placed on CreditWatch with negative implications.
    The ratings downgrade reflects the extent of the ongoing operational
difficulties faced by Speedy Muffler King, which have resulted in a
significant and rapid deterioration in the company's financial performance.
    The ratings have been placed on CreditWatch with negative implications.
This reflects both the incurrence of a technical default by the company under
the terms of its 10 7/8% senior notes due 2006, and the uncertainty
surrounding the success of the company's restructuring initiatives in
restoring operating profitability to acceptable levels.  The company is taking
steps to remedy the technical default, although this will be dependent upon
the availability of new financing from its majority shareholder and bankers.
    Standard & Poor's will meet with management in the near future to review
the capacity of Speedy's restructuring program to restore operating
performance. -- CreditWire

SOURCE  Standard & Poor's CreditWire