S&P removes Impress Metal from negative watch

Standard & Poor's removed Impress Metal Packaging Holdings BV from CreditWatch with negative implications and gave the company a stable outlook. It also confirmed the existing ratings, including the DM200 million of 9 7/8% senior subordinated notes due 2007, rated CCC+, and the company's bank facilities, rated B.

Moody's upgrades power projects

Moody's Investors Service upgraded a series of power projects.

The upgrades included: the senior secured debt of CE Generation, LLC to Ba2 from B1 and of Salton Sea Funding Corp. raised to Ba3 from Caa2, affecting $992 million of securities; Edison Mission Energy Funding Corp.'s $374.2 million of senior secured debt raised to Ba3 from Caa2; FPL Energy Caithness Funding Corp.'s $150 million of senior secured debt raised to Ba3 from Caa2; Juniper Generation LLC's $105 million of senior secured notes raised to B1 from Caa2; and Caithness Coso Funding Corp.'s $413 million of senior secured debt due 2001 and 2009 raised to Ba3 from Caa2.

All ratings were removed from review for further upgrade and the rating outlook for all is positive.

Moody's said its action reflects "a number of positive developments" relating to the outlook for Southern California Edison Co. following the October 2001 settlement with the California Public Utility Commission (CPUC) which allows recovery of past wholesale power procurement costs. Southern California Edison and nearly all the qualifying facilities announced they had successfully agreed to modifications to the terms of certain purchase power agreements between Southern California Edison and QFs.

In addition, Moody's said Southern California Edison is now in a "very liquid position."

Moody's rates new Forest Oil notes Ba3

Moody's Investors Service assigned a Ba3 rating to Forest Oil Corp.'s recent issue of senior unsecured note due 2011 and affirmed the company's existing ratings, affecting a total of $1.2 billion of debt. Ratings confirmed include Forest Oil and Canadian Forest Oil's senior secured bank revolver at Ba1, Forest Oil's existing senior unsecured notes at Ba3 and Forest Oil and Canadian Forest Oil's senior subordinated notes at B1. The outlook on the notes is positive, depending on the extent to which Forst funds acquisitions with secured debt.

Moody's puts Hollywood Entertainment on review for upgrade

Moody's Investors Service put Hollywood Entertainment's rating on review for possible upgrade, affecting $250 million of debt, including the subordinated debt at Caa3.

Moody's said its action follows news that the company has received an underwritten commitment for a new bank credit facility, and that it intends to issue public equity and debt securities for which it has just filed a registration statement.

The rating agency said it believes the proposed refinancing, if successful, will "relieve Hollywood's near term liquidity pressures caused by upcoming amortization under its bank facility and the 2004 maturity of its subordinated notes."

Moody's said its review will look at the final capital structure and the company's business prospects.

It will also look at Hollywood Entertainment's leverage, growth plans and spending needs.

Moody's rates Mobile TeleSystem new notes at Ba3

Moody's Investors Service assigned a Ba3 rating to the planned offering of $300 million of senior unsecured bonds by the Mobile TeleSystem Finance SA unit of Mobile TeleSystem OSJC. This and other ratings on the company are not limited by Russia's Ba3 country ceiling foreign currency debt, Moody's added.

Moody's said its ratings reflect the company's "strong position as a leading mobile operator in Russia," its expectation Mobile TeleSystem will act as a leading consolidator in the Russian mobile market, strong historical and projected cash flow generation and current low level of debt. However Moody's noted it expects debt to grow significantly with network construction and acquisitions.

Moody's rates Stone Energy new notes B2

Moody's Investors Service assigned a B2 rating to Stone Energy Corp.'s new senior subordinated notes. The outlook is positive. The existing ratings of the company were confirmed on Oct. 24.

Moody's said its positive outlook anticipates potential leverage reduction over the next 18 to 24 months from paydown of debt and additions to reserves through drilling.

Acquiring properties from Conoco will add scale, increase prospect inventory, and intensify Stone's holdings in the Gulf of Mexico/Gulf Coast, "where it has had a successful track record of volume growth at competitive costs."

However it said use of debt to fund the acquisition "materially increases financial leverage on Stone's asset base in a period of moderating commodity prices, and credit momentum could become restrained by deeper or longer than expected commodity price weakness that slows the pace of debt reduction and/or the level of cash flow for reinvestment."

Moody's downgrades Global Crossing multiple notches; "liquidity may be insufficient"

Moody's Investors Service downgraded Global Crossing, cutting ratings on $10.9 billion of debt by multiple notches.

Ratings affected include: Global Crossing Holdings, Ltd. senior secured debt, cut to Caa2, from B1, senior unsecured debt, cut to Ca from B2, preferred stock, cut to C from Caa1; Global Crossing Ltd. preferred stock, cut to C from Caa1; and Frontier Corp. senior unsecured debt, cut to Ca from B2. The outlook is negative.

Moody's said the downgrades conclude a review begun on Aug. 3, 2001.

Moody's said the action reflects "our heightened concern that Global Crossing's business plan may be increasingly pressured by protracted softness in global telecom spending and our view that liquidity may be insufficient to sustain a fully funded business model."

While its network is largely complete, Global Crossing "continues to experience the problems facing the broadband sector as a whole, including scaled-back carrier capacity purchasing and heightened competitive pricing pressure," Moody's said.

Wholesale capacity sales fell 57% in the third quarter as measured by cash IRU revenues to $242 million. Moody's noted most IRU sales were to carriers with whom Global Crossing had contracted to make comparable or greater capacity purchases during the quarter; the swap-like characteristic of these reciprocal contracts effectively nullifies the cash benefit of the related cash sales, Moody's said.

The rating agency also questioned management's outlook for a rebound in this sector next year.

While Global Crossing is increasingly focusing on voice and data services to enterprise customers, Moody's said telecommunications services excluding IRU sales saw revenues down 7% sequentially in the third quarter.

Third quarter consolidated cash revenues from continuing operations declined 28% sequentially while the recurring adjusted EBITDA loss of $16 million compared to an EBITDA profit of $425 million in the prior quarter, Moody's added.

At the end of September, Global Crossing had unrestricted cash of $2.3 billion, including $523 million on the books of Asia Global Crossing, available to fund capital expenditures of $1.9-2.2 billion plus $925 million in cash interest and dividends through the end of 2002, by Moody's estimate. Global Crossing expects to be EBITDA break-even by the end of 2002.

As a result Moody's believes the company's funding performance is dependent upon asset sales including Global Marine and IPC. It also noted that if Asia Global Crossing draws on its $400 million line of credit Global Crossing's liquidity will be further diminished.

Moody's downgrades Asia Global Crossing

Moody's Investors Service downgraded Asia Global Crossing's senior unsecured debt to Ca from B2, affecting $1 billion of securities. The action completes a review begun on Oct. 3, 2001. The outlook is negative.

Moody's said its ratings reflect "our heightened concern that Asia Global Crossing's business plan may be increasingly pressured by protracted softness in global telecom spending and our view that liquidity may be insufficient to sustain a fully funded business model."

While the company is nearing completion of its East Asia Global Crossing ring which should result in "a more scalable capex budget," the company continues to experience the problems facing the broadband sector as a whole, including scaled-back carrier capacity purchasing and heightened pricing pressure, Moody's said.

At the end of September, Asia Global Crossing had $523 million in unrestricted cash equivalents, $46 million in unused borrowing capacity under the credit facility of its 64% owned Pacific Crossing Ltd. subsidiary and $400 million under a committed line of credit from its parent, Global Crossing, Moody's said. However, Moody's noted Global Crossing itself is in a relatively tight liquidity position and would be constrained in its ability to downstream cash under this facility in a distress scenario.

Moody's cuts J. Crew outlook to negative

Moody's Investors Service cut its outlook on J. Crew Group to negative from stable and confirmed the existing ratings. Among the $480 million of debt affected is J. Crew Group, Inc.'s $130 million of 12.75% senior discount notes due 2008 at Caa3 and J. Crew Operating Corp.'s $150 million 10.375% sr. sub notes due 2007 at Caa1 and $200 million secured revolving credit facilities due 2003 at B1.

Moody's said it lowered the outlook because of a sharp drop-off in sales during October and November which has caused a significant revision in projections for this fiscal year.

The rating agency noted: "The timing is especially important given J. Crew's dependence on sales of Fall and Holiday product to achieve targeted operating results. Through the first three quarters of this year, J. Crew's sales were in line with peers and also on target with expectations. The company's inventory and marketing plans were appropriate to the weak sales environment and enabled the company to maintain its financial position throughout the year."

S&P lowers Arch Wireless to D

Standard & Poor's lowered its ratings on Arch Wireless Inc., Arch Wireless Communications Inc., and Arch Wireless Holdings Inc. which were not already at D to D. Arch Wireless Inc.'s senior unsecured debt was previously C, Arch Wireless Communications' was also C and Arch Wireless Holding's was CC.

The action follows Arch's filing for Chapter 11 bankruptcy protection.

Arch has been defaulting on some of its debt issues since mid-2001, S&P noted.

S&P rates proposed Avista issue BBB-

Standard & Poor's assigned a BBB- rating to Avista Corp.'s planned first mortgage bond issue. The outlook is negative.

S&P said its ratings are based on the company's "average business position, characterized by low-cost, hydroelectric generation, competitive rates, operating and regulatory diversity in Washington and Idaho, and an above-average service area. However, these strengths are offset by a weak financial profile; hydroelectric generation conditions that are significantly worse than average; a challenging, but slowly improving, regulatory environment in Washington; and continuing involvement in riskier, nonregulated ventures."

"The negative outlook reflects the challenges facing Avista in its effort to improve its financial profile while ensuring the integrity of its electric utility operations, in light of the regulatory uncertainty concerning the company's general rate case filing," S&P added.

S&P withdraws Navigator Gas Transport ratings

Standard & Poor's said it withdrew the ratings on Navigator Gas Transport PLC because of a lack of timely and sufficient information. The company's first priority ship mortgage notes were previously rated CCC- and its second priority ship mortgage notes CC.

Before being withdrawn, S&P said the ratings reflected expectations that Navigator Gas' majority indirect owner "will eventually conclude discussions with the bondholders regarding restructuring options amid weak market conditions for petrochemical gas transport."

S&P rates Terex new notes B

Standard & Poor's assigned a B rating to Terex Corp.'s new senior subordinated notes due 2011 and affirmed the company's existing ratings. The outlook is stable.

S&P commented: "The ratings on Terex reflect the company's leading global positions as a low-cost provider of construction and mining equipment with good geographic and product diversity, offset by highly cyclical and competitive end markets and an aggressive financial profile."

While Terex is exposed to the "highly cyclical and competitive" construction and mining markets, extensive outsourcing means it can pare down costs as demand fluctuates, S&P said.

It also has good geographic, product, and customer diversity and modest capital expenditures (about 1% of sales).

S&P lowers some XO debt to D

Standard & Poor's downgraded XO Communications Inc.'s corporate credit rating and its 10.75% senior notes due 2009 and 10.50% notes due 2009 to D.

It also confirmed ratings on the company's remaining unsecured and subordinated debt and preferred stock. Those issues remain on CreditWatch with negative implications because they are not currently in default. The rating on the company's senior secured bank loan was withdrawn.

The action follows XO's failure to pay interest due Dec. 1, 2001 on the two note issues.

The other ratings will be lowered to D as interest and dividend payments are missed, S&P said.

S&P rates Hollywood Entertainment shelf, puts other ratings on positive watch

Standard & Poor's assigned preliminary CCC senior unsecured and CC subordinated debt ratings to Hollywood Entertainment Corp.'s $300 million shelf registration. It also put the existing ratings on CreditWatch with positive implications including the CCC senior unsecured debt and CC subordinated debt.

S&P said the CreditWatch placement follows the announcement that Hollywood Entertainment has received a fully underwritten commitment for a new bank credit facility.

"If completed, the refinancing would modestly improve Hollywood Entertainment's financial flexibility and reduce its near-term debt service requirements," S&P said.

It added that it will "fully review Hollywood's financing and operation strategies and the improvement in financial flexibility from the new credit agreement with the company's management."

S&P sees Echostar most likely at B+

Standard & Poor's said Echostar Communications Corp. will most likely be rated B+ after it acquires Hughes Electronics Corp. and no higher than BB-.

"Upside rating potential exists for EchoStar if the company finances the Hughes transaction with a large equity component," the rating agency said. "Downside rating risk exists given the integration challenges and heavy debt leverage that EchoStar faces."

On Friday, S&P took various actions on EchoStar, Hughes and PanAmSat, including putting EchoStar Communications Corp.'s B- subordinated debt on CreditWatch developing and Echostar DBS Corp.'s B+ senior unsecured debt on CreditWatch developing.

EchoStar Broadband Corp.'s B senior unsecured debt was put on CreditWatch with positive implications because it anticipates the notes will be exchange for a new class of EchoStar DBS notes, eliminating structural subordination.

S&P lowered PanAmSat Corp. to junk, including cutting its senior unsecured debt to BB- from BBB-, saying the ratings would be constrained by EchoStar's despite its "stronger business and financial profile."

S&P said it downgraded Hughes because the stand-alone company will not be investment grade if the transaction is not approved. Hughes' corporate credit rating was lowered to BB+ from BBB-.

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