S&P downgrades Global Crossing, Asia Global Crossing, keeps on negative watch

Standard & Poor's downgraded Global Crossing Ltd. and its units Global Crossing Holdings Ltd. and Frontier Corp. as well as its 58.8% owned subsidiary Asia Global Crossing Ltd. All ratings remain on CreditWatch with negative implications. Ratings affected include: Global Crossing Ltd.'s preferred stock, cut to CCC- from CCC+; Global Crossing Holdings Ltd.'s senior unsecured debt, cut to CCC from B-, its senior secured bank loan, cut to B- from B+, and its preferred stock, cut to CCC- from CCC+; Frontier Corp.'s senior unsecured debt, cut to CCC from B-, and preferred stock, cut to CCC- from CCC+; and Asia Global Crossing Ltd.'s senior unsecured debt, cut to CCC+ from B-.

S&P said the downgrade follows the company's announcement it will violate bank covenants in the fourth quarter of 2001 due to lower than previously anticipated results.

S&P said it also anticipates Global Crossing's liquidity position will be weaker near term than previously anticipated. If negotiations with its banks do not produce and amendment to the credit facility, Global Crossing's ratings could be lowered further, the rating agency added.

At Sept. 30, Global Crossing had $2.26 billion of unrestricted cash. S&P estimated that is enough to fund the company through 2002, based on moderately improving EBITDA, cost control measures and lower capital expenditures.

But if Asia Global Crossing draws on its $400 million credit facility from Global Crossing, the funding would only last to the third quarter.

That means proceeds from the sale of IPC Informations Systems Inc. and Global Marine Systems will be essential to supporting the company's business plan beyond the third quarter of 2002, S&P added.

S&P said it only downgraded Asia Global Crossing one notch because of the separation it has.

Moody's cuts Insight Communications outlook to stable

Moody's Investors Service cut its outlook on Insight Communications Co., Inc. and its subsidiaries to negative from stable, affecting $3 billion of debt. Affected ratings include Insight Communications Co., Inc. - senior unsecured debt rated B3 - and its subsidiaries, including 50%-owned Insight Midwest LP - senior unsecured debt rated B1 - and its wholly-owned subsidiary Insight Midwest Holdings, LLC (Midwest Holdings) - senior secured debt rated Ba3 - to negative from stable. Moody's also revised the outlook for the debt of Coaxial LLC and its subsidiary Coaxial Communications of Central Ohio, Inc. to negative from stable. The senior unsecured debt of Coaxial and CCCO is rated Caa1 and B3, respectively.

Moody's said the revision "principally incorporates Moody's belief that cash flow growth and related balance sheet strengthening will be slower than originally anticipated, thereby making less likely the prospect of positive senior implied and Midwest Holdings bank loan ratings momentum, and correspondingly more likely downward ratings pressure on the structurally subordinated Midwest and Insight debt, and to somewhat of a lesser extent the Coaxial and Insight Ohio debt, which had previously been expected to benefit from the stronger operating profile of Midwest Holdings."

The rating agency added: "This opinion is partially grounded in the company's comparatively less robust cash flow growth to date and recent reductions to future earnings guidance by management, but also reflects Moody's own heightened concerns that future take-rates for new services may be somewhat more constrained by prolonged weakness as anticipated for the macro-economic environment and potentially comparative weakness in subscriber demographics for Insight's markets."

Moody's downgrades Key3Media, on review for further downgrade

Moody's Investors Service downgraded Key3Media Group, Inc. and put the company's ratings on review for further downgrade, affecting $450 million of debt. Among the reductions, the senior subordinated notes fell to B3 from B2 and the senior secured credit facility to B1 from Ba3.

Moody's said the downgrade reflects "a material level of operational underperformance by the company relative to both initial expectations and revised management guidelines, and significant uncertainty with respect to future operating performance, which is expected to fall well short of requisite levels necessary to substantiate the current ratings."

Moody's said it was previously concerned about the trade-show industry sector, particularly after the Sept. 11 terrorist attacks. But it had thought Key3Media's balance sheet and corresponding financial strength was adequate for "the clearly heightened business risks and comparative lack of diversification at the time that rating actions were taken for the company's peer group."

However that view was re-evaluated after Key3Media's earnings release and "considerably reduced" forward guidance.

S&P downgrades Weigh-Tronix, keeps on negative watch

Standard & Poor's downgraded Weigh-Tronix LLC, including cutting SWT Finance BV's senior secured debt to CCC+ from B- and its subordinated debt to CCC- from CCC. The ratings remain on CreditWatch with negative implications.

S&P said the action is in response to "heightened concerns" about Weigh-Tronix's liquidity. "Financial flexibility has become very constricted, as proceeds from previously anticipated asset disposals have not yet been realized, although the company expects to receive them in the third quarter," the rating agency added.

But despite tight liquidity, S&P expects Weigh-Tronix to be able to make the coupon payment of €6.25 million due Dec. 1 on its €100 million 12.5% subordinated notes due June 2010.

S&P downgrades Polymer Group, still on negative watch

Standard & Poor's downgraded Polymer Group Inc. The ratings remain on CreditWatch with negative implications, where they were placed on March 14, 2001. Ratings affected include Polymer's senior secured debt, cut to B- from B+, and its subordinated debt, cut to CCC from B-.

S&P said the downgrade reflects "heightened concerns related to the company's near-term financial flexibility, onerous debt levels and the continuation of unfavorable business conditions."

It noted Polymer has been operating under a waiver of its bank covenants that is due to expire, if not amended further, on Dec. 29, 2001.

S&P said failure to renegotiate the terms would trigger a breach of leverage and fixed charge coverage covenants, resulting in a default.

The rating agency added that Polymer's initiatives to reduce debt during the current year through asset dispositions or other strategic actions "have not been successful to date, and may prove more difficult than previously anticipated due to challenging credit market and economic conditions."

S&P downgrades Wickes, negative outlook

Standard & Poor's downgraded Wickes Inc., including reducing its senior subordinated debt rating to CCC from CCC+. The outlook is negative.

S&P said the downgrade reflects the company's "marginal cash flow and liquidity, and Standard & Poor's concern regarding the company's ability to improve operations if lumber pricing remains volatile and the housing market slows significantly in light of the weakening U.S. economy."

The rating agency said EBITDA coverage of interest is trending below 1.0 times, compared with 1.8x in 1999.

S&P downgrades Mattress Discounters

Standard & Poor's downgraded Mattress Discounters Corp., including cuttings its $20 million bank loan due 2005 to CCC- from CCC+ and its $140 million 12.625% senior unsecured notes due 2007 to CC from CCC.

Fitch downgrades Viasystems, outlook negative

Fitch downgraded Viasystems Inc.'s senior subordinated notes to CCC- from B- and its senior secured bank facility rating to B- from B+. The outlook remains negative.

Fitch said it took the action because of the company's "continued weakened credit protection measures, limited financial flexibility, and further deterioration of the company's end markets. The company will continue to suffer from its exposure to telecommunications and networking customers (more than 50% of revenues) due to the difficult economic and industry environment.

"The negative outlook incorporates the company's high leverage and increasingly strained capital structure, which is anticipated to further pressure credit protection measures. Other factors considered are the concentrated customer base, event risk surrounding the company's restructuring, and overall limited revenue visibility in the marketplace. The ratings also consider Viasystems' strong niche position in the electronic manufacturing (EMS) industry and worldwide full-service footprint, especially in low-cost regions like China."

S&P puts Eldorado Resorts on negative watch

Standard & Poor's put Eldorado Resorts LLC on CreditWatch with negative implications. Ratings affected include the senior secured bank loan at BB and the subordinated debt at B.

S&P said the action reflects Eldorado's operating results, which continued to be significantly below last year's level due to a competitive market environment.

In addition, the rating agency said, Eldorado reported that it was in violation of bank covenants and is seeking a waiver from the bank group.

S&P downgrades Lodgian, still on negative watch

Standard & Poor's downgraded Lodgian Inc. and Lodgian Financing Corp. All ratings remain on CreditWatch with negative implications. Affected ratings include Lodgian Financing's senior secured bank loan, cut to CC from CCC+ and its subordinated notes, cut to C from CCC-.

S&P said the downgrade is in response to Lodgian's announcement that it is currently not in compliance with its senior credit facility and reflects management's expectations that it will not meet its Dec. 31 amortization payment on its senior secured credit facility and its Jan. 15, 2002, interest payment on its $200 million subordinated notes due 2009.

Although management has reached a forbearance agreement with its lenders until Dec. 31, the outcome of its negotiations is still uncertain, the rating agency said. If the amortization and interest payments are not made, the issue ratings will be lowered to D.

S&P downgrades Pinnacle Holdings, still on negative watch

Standard & Poor's downgraded Pinnacle Holdings Inc. and its Pinnacle Tower Inc. unit. The ratings remain on CreditWatch with negative implications. Ratings affected include Pinnacle Holdings senior unsecured debt, cut to CCC- from CCC, and Pinnacle Towers bank debt, cut to CCC+ from B-.

S&P said the downgrade is in response to "heightened concerns about the company's liquidity, in light of its announcement that it is not in compliance with financial covenants under its bank facility. The company is negotiating with the bank group to obtain waivers and amendments to the bank covenants, though it is uncertain whether Pinnacle will be successful in these efforts. Absent receipt of this agreement in the near term, the ratings will be lowered further."

The rating agency commented that Pinnacle Holdings' business position is "very weak relative to other tower operators. Unlike the other major independent tower players, it does not have any anchor tenant contracts with large national or regional wireless telephony carriers."

Moody's puts Weigh-Tronix on review for downgrade

Moody's Investors Service put Weigh-Tronix LLC and its subsidiaries including SWT Finance BV on review for possible downgrade. Affected ratings include SWT's €100 million 12.5% senior subordinated notes.

Moody's said the review reflects "growing concerns as to Weigh-Tronix's ability to grow cash flows and de-leverage the business in line with Moody's expectations, and to an extent sufficient to remain in compliance with the financial covenants under its senior credit facility," the company's "highly challenging operating environment, which Moody's believes will likely be adversely impacted by recent events in the US and a weaker macroeconomic climate," and weak liquidity, with "very little remaining financial and operating financial flexibility to absorb potential future negative credit events."

Moody's puts Juniper Generation on review for upgrade

Moody's Investors Service put the Caa2 rating on Juniper Generation, LLC's $105 million senior secured notes on review for possible upgrade.

The review follows Juniper project finance lenders' approvals of amended PG&E power contracts, additional agreements subsequently reached with the project lenders and implementation of hedges to lock in spark spreads on the fixed revenues of the amended power contracts, Moody's said.

S&P cuts Burlington Industries to D

Standard & Poor's downgraded Burlington Industries Inc. to D after the company filed for Chapter 11. Previous ratings included the senior unsecured debt at CCC+.

S&P cuts Benedek Communications to D

Standard & Poor's downgraded Benedek Communications Corp. to D, including cutting its senior subordinated discount notes previously rated C.

S&P cuts Metals USA to D

Standard & Poor's downgraded Metals USA Inc. to D after the company filed for Chapter 11. It previously rated the senior secured bank loan at B- and the subordinated debt at CCC-.

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