S/P AFFIRMS BANNER <BNR>, LOWERS REXNORD <REX>
Standard and Poor's Corp said it
affirmed Banner Industries Inc's 135 mln dlrs of B-minus
subordinated debt following its purchase of Rexnord Inc. 
    Rexnord's 50 mln dlrs of 12-3/4 pct debentures of 1994 were
cut to B from A-minus to reflect the merger with Banner.
    While increasing Banner's size and diversity, S and P said
the transaction heightens financial risk, with debt to capital
rising to more than 90 pct.
    Near-term earnings and cash flow protection will weaken
from the acquisition, though Banner's plans to sell some
Rexnord assets will reduce debt for the medium term.
 Reuter
