BALLY <BLY> UNIT MAY BE DOWNGRADED BY S/P
Standard and Poor's Corp said it may
downgrade the 100 mln dlrs of B-plus 13-5/8 pct senior
subordinated debentures due 1997 of Bally Health and Tennis
Corp, a unit of Bally Manufacturing Corp.
    S and P cited the parent's proposals to sell Bally Health
for more than 500 mln dlrs to an investor group. It noted the
transaction includes the assumption of Bally Health's debt.
    Although the investor group's plans are not known, the
acquisition will probably be debt financed and markedly
increase Bally Health's financial risk. S and P said the sale
of the unit would increase the parent's financial position.
    In a related action, Standard and Poor's affirmed the debt
ratings of Bally Manufacturing and related entities. Affirmed
were BB first mortgage bonds, BB-minus second mortgage bonds
and B-plus subordinated debt.
    S and P said pro-form debt leverage for Bally
Manufacturing, adjusted to capitalize operating leases, drops
to a still high 68 pct from an aggressive 75.5 pct at June 30.
Adjusted for asset sales, the parent company's return on
capital, 11.6 pct in 1986, should remain subpar, S and P said.
 Reuter
