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Non-Tech : Alaska Air (ALK) -- Ignore unavailable to you. Want to Upgrade?

To: wolfgangl who wrote (15)	2/2/1998 8:09:00 PM
From: Boplicity	Respond to of 152

Alaska Air Group Inc. & Unit Placed on WatchPos by S&P NEW YORK--(BUSINESS WIRE)--S&P's CreditWire 2/2/98--Standard and Poor's today placed its ratings on Alaska Air Group Inc. [NYSE:ALK - news] and its subsidiary, Alaska Airlines Inc., on CreditWatch positive (see list below). Approximately $290 million of rated debt is affected. The CreditWatch listing reflects Alaska Air Group's improved earnings and expected further balance sheet improvement due to anticipated conversion of debt to equity. Alaska Air Group reported record profits of $72.4 million in 1997, nearly double the $38 million it earned in 1996. In addition, on Jan. 29, 1998, the company announced it was calling for full redemption $132 million of convertible subordinated debt. The debt will likely be converted into equity due to the substantial difference between the conversion price ($33.60 a share) and the current market price (around $50 a share). As a result, Alaska Air Group's lease-adjusted debt leverage will decline to around 70%, a fairly good level for an airline. Alaska Air Group Inc.'s ratings reflect a modest route network serving competitive markets offset, to some extent, by low operating costs. Alaska Airlines Inc., the principal operating unit, faces competition from low cost, low fare Southwest Airlines Co. ('A'-minus/Stable/-) and United Air Lines Inc.'s(double-'B'-plus/Positive/). Shuttle in West Coast markets. However, the airline has done an excellent job of reducing its cost structure, aided by labor cost concessions and one of the youngest fleets in the industry. At the same time, capacity growth in West Coast markets has abated and fares have stabilized. As a result, Alaska Airlines is now a strong competitor in those markets and its financial profile has improved somewhat. Alaska Air Group is the holding company for Alaska Airlines and Horizon Air Industries Inc. Alaska Airlines is the nation's tenth largest airline. It operates hubs at Seattle, Wash.; Portland, Ore.; and Anchorage, Ala. From these hubs, the airline serves destinations in Alaska, to Alaska from the lower 48 states, along the West Coast of the U.S. and Canada (Vancouver) and into Mexico, and to Russia. Horizon Air is a commuter airline that operates out of hubs at Seattle and Spokane, Wash.; Portland, Ore.; and Boise, Idaho. Alaska Air Group has also improved its financial profile, despite a heavy operating lease burden. In December 1997, the company sold approximately $105 million in equity and the conversion of the convertible subordinated debentures will likely add another $132 million to equity, resulting in lease-adjusted debt leverage of around 70%. -- CreditWire -0- RATINGS PLACED ON CREDITWATCH INC. POSITIVE Alaska Air Group Corporate credit rating BB- Senior unsecured debt B Subordinated debt B Alaska Airlines Inc. ..Corporate credit rating BB- Equipment trust certificates BB+