Fitch cuts AmeriServ, on watch

Fitch Ratings downgraded AmeriServ Financial, Inc. including cutting its long-term debt to B from BB and trust preferreds to CCC+ from B+ and put it on Rating Watch Negative.

Fitch said the rating action is driven by increased uncertainty about AmeriServ's ability to meet future financial obligations, particularly with respect to its trust preferred debt.

Liquidity at the parent company has weakened over the past few periods due to continued lack of earnings momentum and an oversized debt burden as the spin-off of Three Rivers Bank (April 1, 2000) left AmeriServ with one less subsidiary from which to upstream dividends to service its relatively large $34.5 million 8.45% trust preferred issue, Fitch said.

The situation has been further exacerbated by a Memorandum of Understanding entered into by AmeriServ and AmeriServ Bank with the Federal Reserve Bank of Philadelphia and the Pennsylvania Department of Banking in the first quarter of 2003. Under the terms of the memorandum, AmeriServ and AmeriServ Bank cannot declare dividends, the company may not redeem any of its own stock, and AmeriServ cannot incur any additional debt other than in the ordinary course of business, in each case, without the prior written approval of the regulators.

S&P rates CMA CGM notes BB-

Standard & Poor's assigned a BB- rating to CMA CGM SA's planned €150 million notes. The outlook is positive.

S&P said CMA CGM's ratings reflect its position as the world's eighth-largest global container shipping company by capacity, with an extensive route network and demonstrated successful substantial organic growth. They also reflect the challenges CMA CGM faces from sustained competition in key markets and an aggressive financial profile.

Despite the group's extensive global route network, revenues from CMA CGM's are centered around Asia-Europe trade, which is expected to grow at above-average rates, with China the main growth catalyst, S&P said. This trade is, however, expected to remain very competitive.

The group achieves better margins and more stable earnings in its several niche North-South routes.

CMA CGM's rapid growth over the past few years has mainly come about through expansion of its route network. Investments in its fleet have, however, led to significant additional debt in its capital structure over the past few years, S&P said. Profitability and return on capital, however, are well in line with the industry average over the cycle, which supports the ratings.

The positive outlook reflects the possibility that ratings could be raised in the medium term if CMA CGM is able to improve its financial profile.

Fitch says East Coast Power unchanged

Fitch Ratings said it does not expect the planned acquisition by Goldman Sachs to have a material effect on the credit quality of East Coast Power. Fitch currently rates East Coast Power's senior secured bonds BBB-.

Fitch currently views East Coast Power as a bankruptcy remote entity. Therefore, the assigned rating reflects East Coast Power's credit quality on a stand-alone basis, independent of the credit quality of its owners.

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