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Mark IV Industries Ratings Placed on S&PWatch, Negative

9 October 1998

Mark IV Industries Ratings Placed on S&PWatch, Negative

    NEW YORK, Oct. 8 -- Standard & Poor's today placed its
triple-'B'-minus corporate credit rating on Mark IV Industries Inc. and its
double-'B'-plus rating on the company's subordinated debt on CreditWatch with
negative implications.  About $775 million of long-term debt securities are
affected.
    An active common share repurchase program has left the firm with an
aggressively leveraged balance sheet, and subpar cash flow protection.  Stock
repurchases for fiscal 1998 totaled $80 million, with additional repurchases
of $151.5 million for the six months ended Aug. 31, 1998.  Moreover, further
repurchases are likely to occur.  Adjusted debt to capital at Aug. 31, 1998
stood at about 62%, and funds from operations to total debt for fiscal 1999 is
expected to be close to 20%.  Current ratings factor in significantly stronger
credit measures, including Mark IV's total debt to capital in the 40%-50%
range and funds from operations to total debt averaging between 30%-35%.
    Mark IV is a leading producer of engineered systems and components for
power transmission, fluid transfer, and filtration applications for automotive
and industrial markets.  The firm is nearing completion of its restructuring
plan, which should improve operational efficiencies, eliminate duplicative
costs, and reduce working capital requirements.  The plan should result in
sizable cash flow benefits.
    Standard & Poor's will review Mark IV's business plan and financial plan
and policies to evaluate management's commitment and resources to maintain an
investment grade financial profile. -- CreditWire