) on CreditWatch with negative implications based on concerns relating to recently filed shareholder lawsuits and the Securities and Exchange Commission's request for information about two independent board members' departures and about the severing of its audit firm, Arthur Andersen LLP. The company has engaged a new audit firm and is taking other steps to help ameliorate concerns. Even so, these developments raise concerns that two convertible debt issues of $850 million and $900 million will be put to the company in February and July 2003, respectively.
Standard & Poor's cannot predict the likelihood or timeframe in which the company's stock price could recover and relieve the risk of the put-able securities. Current resources to address these potential needs, plus outstanding commercial paper, include cash balances of roughly $500 million as of Mar. 31, 2002, as well as approximately $900 million of availability under a 364-day facility (last renewed in April, 2002), that has a one-year term-out feature at the company's option. In addition, an unused $500 million revolving credit facility is available until its June, 2003, maturity.
Standard & Poor's will monitor developments with regard to the shareholder suits, SEC requests, and the likely adequacy of financial resources as well as Omnicom's underlying business health, in evaluating the effect, if any, on credit quality. The CreditWatch listing could be resolved in one to four weeks, depending on these issues. From Standard & Poor's CreditWire