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Strategies & Market Trends : Bankruptcy Predictor Model -- Ignore unavailable to you. Want to Upgrade?

To: Razorbak who wrote (356)	5/23/1999 11:03:00 PM
From: Oblomov	Read Replies (1) \| Respond to of 477

RB, Could you take a look at SHEL? My quick analysis yields a predictor value of 1.5 - the stock is still trading over 5, and may thus be shortable. AA

To: Razorbak who wrote (356)	5/24/1999 12:41:00 PM
From: Razorbak	Read Replies (1) \| Respond to of 477

Comments - KCS More bad news today. biz.yahoo.com S&P Cuts KCS Energy Senior Unsecured Debt Monday May 24, 10:15 am Eastern Time (Press release provided by Standard & Poor's) NEW YORK, May 24 - Standard & Poor's today lowered its ratings on KCS Energy Inc. (See list below). The ratings remain on CreditWatch with negative implications where they were placed on April 2, 1999. Approximately $275 million of rated debt is affected. The ratings action follows Standard & Poor's assessment that Houston-based KCS is poorly positioned to meet its likely obligations on its bank credit facilities and outstanding notes while maintaining capital spending levels necessary to prevent material erosion of its reserve base. At year-end 1998, KCS took a $268.5 million pretax price-related ceiling test writedown, lowering year-end reserves by 24.8 million boe to 51.7 million boe (83% gas). Concurrently, the company took a $114 valuation allowance (82% of which relates to the ceiling test writedown) on net deferred tax assets. These charges combined with poor operating results for the year placed KCS in violation of a tangible net worth covenant under its $175 million senior secured bank credit facilities. KCS announced on May 18, 1999, that it has signed a forbearance agreement with its bank group that will defer a borrowing base redetermination until July 1, 1999, and prevent the banks from exercising any remedies as a result of the existing defaults until June 30, 1999. However, KCS will remain in technical default at the end of that period. The bank group could then accelerate repayment of a material portion of the $150 million outstanding, or demand immediate full repayment. If the latter occurs, noteholders would have the right to declare outstanding amounts immediately payable, which would likely cause the company to default because of its lack of financial resources to meet payment. Improved commodity prices in the second quarter should allow KCS to repay about $10 million on the bank facilities before June 30, 1999. This amount could be enhanced if the company is successful in accelerating its asset sale program. Still, in the event that banks require accelerated debt repayment, diminished capital spending and the sale of reserves will limit KCS's ability to maintain production and support its already short reserve life. Standard & Poor's could further lower KCS's ratings if bank repayment demands jeopardize the company's ability to meet upcoming interest payments. OUTSTANDING RATINGS LOWERED AND REMAIN ON CREDITWATCH WITH NEGATIVE IMPLICATIONS Rating To, From, KCS Energy Inc. Corporate credit rating, CCC, B- Senior unsecured debt, CCC-, CCC+ Subordinated debt, CC, CCC