Moody's: New ratings for high-yield issuers

Moody's Investors Service announced the impact of the implementation of its loss given default and probability of default rating methodology to existing non-financial speculative-grade corporate issuers in Europe, Middle East and Africa.

The implementation of the loss given default methodology follows the introduction of the methodology in September 2006. Most of the rating actions Moody's announced relate to senior secured loans.

Moody's said it developed the loss given default methodology in response to research demonstrating that losses for loans were lower than those for similarly rated bonds. Another reason was strong market interest in the disaggregation of ratings into their two components: probability of default and severity of loss, the agency said.

The new methodology disaggregates these two key assessments in long-term ratings, enhances the consistency in Moody's notching practices across industries and improves the transparency and accuracy of its ratings, reflecting different experiences of recovery across the capital structure, the agency said.

The ratings changes include:

• Alcatel-Lucent's senior unsecured bank credit facility probability of default rating of Ba2 to Ba2 with a loss given default of 3; 4 ¾% senior unsecured convertibles/exchangeables bond/debenture due 2011 of Ba2 to Ba2 with loss given default of 3; $1.5 million senior unsecured medium-term note program of Ba2 to Ba2 with a loss given default of 3; €500 million senior unsecured medium-term note program of Ba2 to Ba2 with a loss given default of 3; 6.375% senior unsecured regular bond/debenture due 2014 of Ba2 to Ba2 with a loss given default of 3; $500 million senior unsecured regular bond/debenture due 2010 of Ba2 to Ba2 with a loss given default of 3; €100 million 4.375% senior unsecured regular bond/debenture due 2009 of Ba2 to Ba2 with a loss given default of 3; €120 million 4.375% senior unsecured regular bond/debenture due 2009 of Ba2 to Ba2 with a loss given default of 3.

• Lucent Technologies Capital Trust I's $1.75 billion 7 ¾% preferred stock due 2017 of B2 to B1 with a loss given default of 6; Lucent Technologies, Inc.'s $1.755 billion multiple seniority shelf, subordinated of provisional B2 to provisional B1 with loss given default of 6; $1.755 billion multiple seniority shelf, regular/junior preferred stock of provisional B3 to provisional B1 with a loss given default of 6; $1.755 billion multiple seniority shelf, senior unsecured of provisional Ba3 to provisional Ba2 with a loss given default of 3; 8% subordinate convertibles/exchangeables bond/debenture due 2031 of B2 to B1 with a loss given default of 6; 2 ¾% senior unsecured convertibles/exchangeables bond/debenture due 2023 of Ba3 to Ba2 with a loss given default of 3; 2 ¾% senior unsecured convertibles/exchangeables bond/debenture due 2025 of Ba3 to Ba2 with a loss given default of 3; $300 million 6 ½% senior unsecured regular bond/debenture due 2028 of Ba3 to Ba2, with a loss given default of 3; $500 million 5 ½% senior unsecured regular bond/debenture due 2008 of Ba3 to Ba2 with a loss given default of 3; $1.36 billion 6.45% senior unsecured regular bond/debenture due 2029 of Ba3 to Ba2 with a loss given default of 3

• Basell Holdings BV's probability of default rating at Ba3; Basell AF SCA's 8.375% senior unsecured regular bond/debenture due 2015 of B2 to B2 with a loss given default of 5; Basell Finance Company BV's $300 million 8.1% senior unsecured regular bond/debenture due 2027 of B2 to B2 with a loss given default of 5; Basell Holdings BV's

senior secured bank credit facility of Ba3 to Ba2 with a loss given default of 2.

• Aurelia Energy NV's probability of default rating at Ba3.

• Brenntag Holding GmbH's probability of default rating at B2; senior subordinated bank credit facility of B3 to Caa1 with a loss given default of 5; senior secured bank credit facility of B2 to B1 with a loss given default of 3.

• Buhrmann NV's probability of default rating at Ba3, senior secured bank credit facility of Ba3 to Ba2 with a loss given default of 3; 2% subordinate convertibles/exchangeables bond/debenture due 2010 of B2 to B2 with a loss given default of 6; Buhrmann US Inc.'s 8 ¼% senior subordinated regular bond/debenture due 2014 of B2 to B2 with a loss given default of 6; 7.875% senior subordinated regular bond/debenture due 2015 of B2 to B2 with a loss given default of 6.

• CEVA Group plc's probability of default rating at B1; senior secured bank credit facility of B1 to Ba2 with a loss given default of 2; 10% senior subordinated regular bond/debenture due 2016 of B3 to B3 with a loss given default of 6; 8 ½ % senior unsecured regular bond/debenture due 2014 of B2 to B2 with a loss given default of 4.

• Carlson Wagonlit BV's probability of default rating at Ba3; CWT Europe Holdings SAS's senior secured bank credit facility due 2014 of Ba3 to Ba2 with a loss given default of 3; CWT Global BV's senior secured bank credit facility due 2014 of Ba3 to Ba2 with a loss given default of 3; Carlson Wagonlit BV's senior secured bank credit facility due 2013 of Ba3 to Ba2 with a loss given default of 3, senior secured regular bond/debenture due 2015 of B2 to B2 with loss given default of 5; Carlson Wagonlit New Holdco Ltd.'s senior secured bank credit facility due 2014 of Ba3 to Ba2 with a loss given default of 3; Horizon Merger Corp.'s senior secured bank credit facility due 2014 of Ba3 to Ba2 with a loss given default of 3.

• Cablecom Luxembourg SCA's probability of default rating at B1; senior secured bank credit facility of B1 to Ba3 with a loss given default of 3; 8% senior unsecured regular bond/debenture due 2016 of B3 to B3 with a loss given default of 6.

• Cognis GmbH's probability of default rating at B1; 9 ½% senior secured regular bond/debenture due 2014 of B3 to B3 with a loss given default of 5; Cognis Deutschland GmbH & Co. KG's senior secured bank credit facility of B1 to Ba2 with a loss given default of 2; senior secured regular bond/debenture due 2013 of B2 to B2 with a loss given default of 4.

• Fresenius Medical Care AG & KgaA's probability of default rating at Ba2; senior unsecured bank credit facility of Ba2 to Ba1 with a loss given default of 3; Fresenius Medical Care Capital Trust II's $450 million preferred stock due 2008 of B1 to B1 with a loss given default of 6; Fresenius Medical Care Capital Trust III's DM300 million preferred stock due 2008 of B1 to B1 with a loss given default of 6; Fresenius Medical Care Capital Trust IV's $225 million preferred stock due 2011 of B1 to B1 with a loss given default of 6; Fresenius Medical Care Capital Trust V's €300 million preferred stock due 2011 of B1 to B1 with a loss given default of 6.

• Gate Gourmet Borrower LLC's probability of default rating at B2; senior secured bank credit facility (first-lien) of B2 to B1 with a loss given default of 3; senior secured bank credit facility (second-lien) of Caa1 to B3 with a loss given default of 4.

• Ineos Group Holdings plc's probability of default rating at Ba3; 8 ½% senior secured regular bond/debenture due 2016 of B2 to B2 with a loss given default of 5; 7.875% senior secured regular bond/debenture due 2016 of B2 to B2 with a loss given default of 5; Ineos Holdings Ltd.'s senior secured bank credit facility of Ba3 to Ba2 with a loss given default of 3; senior secured bank credit facility (second-lien) of B1 to B1 with a loss given default of 5; Ineos Vinyls Finance plc's 9.125% senior unsecured regular bond/debenture due 2011 of B3 to B2 with a loss given default of 6.

• IT Holding SpA's probability of default rating at B3; IT Holding Finance SA's 9.875% senior unsecured regular bond/debenture due 2012 of Caa1 to B3 with a loss given default of 3.

• Lucite International Group Holdings Ltd.'s probability of default rating of B1; Lucite International Finco Ltd.'s

senior secured bank credit facility of provisional B1 to Ba3 with a loss given default of 3; Lucite International US Finco Ltd.'s senior secured bank credit facility of provisional B1 to Ba3 with a loss given default of 3.

• TDC A/S's probability of default rating at Ba3; $6 billion senior unsecured medium-term note program of Ba3 to B1 with a loss given default of 5; DM500 million 5% senior unsecured regular bond/debenture due 2008 of Ba3 to B1 with a loss given default of 5; Y3 billion 1.28% senior unsecured regular bond/debenture due 2008 of Ba3 to B1 with a loss given default of 5; €350 million 5.625% senior unsecured regular bond/debenture due 2009 of Ba3 to B1 with a loss given default of 5; €750 million 6 ½% senior unsecured regular bond/debenture due 2012 of Ba3 to B1 with a loss given default of 5; senior secured bank credit facility of Ba2 to Ba2 with a loss given default of 3.

• Maxeda's probability of default rating at B1; Victoria Acquisition III BV's 7.875% senior subordinated regular bond/debenture due 2014 of B2 to B3 with a loss given default of 5.

• Virgin Media Inc.'s probability of default rating at Ba3; Virgin Media Finance plc's 9 ¾% senior unsecured regular bond/debenture due 2014 of B2 to B2 with a loss given default of 6; 8 ¾% senior unsecured regular bond/debenture due 2014 of B2 to B2 with a loss given default of 6; 9.125% senior unsecured regular bond/debenture due 2016 of B2 to B2 with loss given default of 6; Virgin Media Investment Holdings Ltd.'s senior unsecured bank credit facility due 2013 of B1 to B2 with a loss given default of 5; senior secured bank credit facility due 2011 of Ba3 to Ba2 with a loss given default of 3; senior secured bank credit facility due 2012 of Ba3 to Ba2 with a loss given default of 3.

• Wind Telecomunicazioni SpA's probability of default rating at Ba3; senior secured bank credit facility of Ba3 to Ba2 with a loss given default of 3; Wind Acquisition Finance SA's 10 ¾% senior unsecured regular bond/debenture due 2015 of B2 to B2 with a loss given default of 6; 9 ¾% senior unsecured regular bond/debenture due 2015 of B2 to B2 with a loss given default of 6; Wind Finance SL SA's senior secured bank credit facility due 2014 of B1 to B1 with a loss given default of 5.

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