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Fitch: Liquidity and Covenant Cushions Adequate for Most Large Speculative-Grade Issuers

CHICAGO--(BUSINESS WIRE)-- Link to Fitch Ratings' Report: Fitch 50: Liquidity and Covenant Update

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=691051

The 'Fitch 50: Liquidity and Covenant Update' report provides a brief liquidity and covenant update for those issuers contained in the Fitch Ratings report 'Fitch 50 - Structural Profiles of 50 Leveraged Credits' (June 20, 2012).

According to the report, near-term liquidity remains ample for many of the Fitch 50 issuers. Of the issuers studied, 64% have more than a combined $1 billion in cash and revolver availability. While most have addressed their near-term debt maturities over the past several periods, a number of opportunistic issuers continue to address their 2014 maturities. Specifically, a receptive U.S. high yield and leveraged loan markets have eased a great deal of the refinancing pressure over the last 18 months. Covenant headroom remains adequate for most of these large issuers. Approximately 53% of the issuers saw a covenant cushion decline over the last period. However, the average percentage cushion decline was minimal at only 5%.

Given the economic uncertainty both in the U.S. and overseas, Fitch remains focused on liquidity and covenant flexibility for many of these highly leveraged issuers. Marginal top-line growth coupled with limited opportunities for further cost cutting may affect future cash flow levels, which ultimately may make additional debt reduction more difficult over the next few quarters.

For more information, visit 'www.fitchratings.com/usleveragedfinance'.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'U.S. Leveraged Finance Spotlight Series Community Health Systems, Inc.' (Oct. 1, 2012);

--'U.S. Leveraged Finance Stats Quarterly - Second Quarter 2012' (Sept. 28, 2012);

--'U.S. Leveraged Finance Spotlight Series: Caesars Entertainment Corp.' (Sept. 5, 2012);

--'U.S. Leveraged Finance Market Quarterly - Second-Quarter 2012' (July 23, 2012);

--'Fitch 50 - Structural Profiles of 50 Leveraged Credits' (June 20, 2012).

Applicable Criteria and Related Research:

Leveraged Finance Market Quarterly: Second-Quarter 2012

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=683423

Fitch 50 -- Structural Profiles of 50 Leveraged Credits - Amended

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=685134

U.S. Leveraged Finance Spotlight Series Community Health Systems, Inc.

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=687271

US Leveraged Finance Stats Quarterly ¬タヤ Second Quarter 2012

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=688720

U.S. Leveraged Finance Spotlight Series: Caesars Entertainment Corp.

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=683491

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Fitch Ratings
Darin Schmalz, +1-312-606-2324
Director
Fitch. Inc.
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or
Mike Simonton, CFA, +1-312-606-3138
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or
Media Relations, New York
Brian Bertsch, +1 212-908-0549
brian.bertsch@fitchratings.com

Source: Fitch Ratings