General Cable (BGC) Placed on CreditWatch Negative by S&P

Standard & Poor's Ratings Services said today it withdrew its 'B+' issue rating on General Cable Corp.'s (NYSE: BGC) $250 million senior unsecured notes due 2019 because the company withdrew this note offering on Sept. 29, 2014. We also placed our 'BB-' corporate credit and various issue-level ratings on General Cable on CreditWatch with negative implications. The CreditWatch negative listing means we could affirm or lower the ratings following our review.

We are placing our ratings on General Cable on CreditWatch with negative implications as a result of the company's decision to withdraw its $250 million senior unsecured note offering, which may prompt us to revise our liquidity assessment to less than adequate. Part of the proceeds from the $250 million note offering were supposed to refinance a $125 million note that must be addressed by Dec. 31, 2014. Without new financing, we expect General Cable will use its ABL to repay the $125 million notes, thereby reducing availability to borrow under the ABL such that the company may no longer meet our 1.2x threshold for liquid sources over uses. The $125 million notes need to be refinanced or repaid by Dec. 31, 2014, to avoid acceleration of the ABL's maturity to that date. We do currently expect that General Cable will be able to meet a two-pronged covenant test for using its ABL to repay the $125 million note--those covenants being maintenance of at least $100 million in
excess ABL availability and a minimum 1.15x fixed charge coverage ratio pro forma for note repayment.

In resolving the CreditWatch listing, Standard & Poor's expects to meet with management and assess the company's capital structure, operating performance, and liquidity by Dec. 31, 2014.

"We could lower the corporate credit rating by at least one notch if we deem liquidity to be less than adequate. This could occur if the company uses the ABL to refinance the $125 million notes, does not renew some of its foreign short-term lines of credit with outstanding balances, or suffers weakening performance in the fourth quarter of 2014," said Standard & Poor's credit analyst Amanda Buckland. "These events could reduce the company's sources of liquidity to less than 1.2x uses of liquidity, a level that we consider less than adequate. We could affirm the ratings if the company has adequate liquidity and adjusted debt leverage remains less than 5x."

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