On Dec. 15, 2006, Standard&Poor's Ratings Services revised its rating outlook on Houston, Texas-based funeral home operator Carriage Services Inc. to negative from stable. Ratings on the company, including the 'B' corporate credit rating, were affirmed. The company had $229 million in debt outstanding as of Sept. 30, 2006. The outlook revision incorporates the company's continued underperformance compared with our earlier expectations, and our belief that there is a minimal cushion under its bank agreement financial covenants. Lower margins in both its funeral and cemetery businesses reflect the greater-than-expected difficulty in the company's operating turnaround plan. The low-speculative-grade rating on Carriage reflects the funeral home operator's significant financial burden in an industry that, though fairly predictable, is subject
