S&P cuts Charter outlook to negative

Standard & Poor's lowered its outlook on Charter Communications Inc. to negative from stable and confirmed the company's ratings including its corporate credit at BB, affecting $16 billion of debt.

S&P said its action is in response to the delay in improvement of Charter's financial parameters.

Charter's pro forma average consolidated debt to full year EBITDA (earnings before interest, taxation, depreciation and amortization) for 2001 and year-end debt to annualized fourth quarter EBITDA were both about 8.1 times, S&P said. The maximum ratio appropriate for Charter's BB rating is 7.9 times.

The rating agency added that it does not expect the measures to return to earlier levels until the latter part of 2002 at the earliest.

However despite the delay in balance sheet improvement, Charter continues to perform well, S&P added.

S&P rates new Circus and Eldorado notes at B+

Standard & Poor's assigned a B+ rating to the $160 million of mortgage notes due 2012 to be issued by Circus and Eldorado Joint Venture and Silver Legacy Capital Corp. The outlook is stable.

Moody's downgrades Jazztel two notches

Moody's Investors Service downgraded Jazztel plc by two notches. The outlook is negative. Ratings affected include Jazztel's €342 million 13.25% senior unsecured notes due 2009, €104 million and $90 million 14.0% senior unsecured notes due 2009 and €190 million 14.0% senior notes (and warrants) due 2010, all lowered to Caa3 from Caa1.

Moody's said it lowered Jazztel's ratings because of concerns about the company's ability to generate enough cash flow to adequately service its large debt burden.

Those concerns were heightened by Jazztel's announcement of reduced earnings guidance for 2001 and 2002, the rating agency said.

Although the company has a revised strategy to preserve cash and curtail capital expenditure, Moody's said it is concerned that over the next 12-18 months "Jazztel will be challenged to grow into its capital structure, which may prompt a re-evaluation of the balance sheet structure."

Moody's raises Chattem outlook to stable

Moody's Investors Service raised its outlook on Chattem Inc. to stable from negative. Affected ratings include Chattem's $275 million 8 7/8% senior subordinated notes due 2008 rated B2.

Moody's said it raised the outlook because of Chattem's "improved situation with regard to its core Dexatrim brand as well as its materially reduced leverage and enhanced cash position."

Leverage and cash are in a better position after Chattem's sale of the Ban deodorant brand in September 2000 for approximately $160 million and the company's ongoing ability to generate stable cash flow from core operations, as shown in recently released results for the three and 12 months ending Nov. 30, 2001, Moody's said.

Moody's lowered the outlook in October 2000 in response to unclear business and cash flow risks associated with its Dexatrim brand's original formulation, withdrawn from the marketplace in late 2000 due to FDA concerns regarding phenylpropanolamine, PPA.

Over the past 12 to 14 months, Chattem has successfully replaced this core brand without meaningful decreases in margins or related cash flow, Moody's said.

S&P confirms Courtyard by Marriott II

Standard & Poor's confirmed Courtyard by Marriott II LP's ratings and removed them from CreditWatch where they were placed on Sept. 21, 2001. The outlook is negative. Ratings affected include Courtyard by Marriott II's $127.4 million 10.75% senior secured notes due 2008, rated B.

S&P said its actions reflects its expectations that Courtyard by Marriott II's limited-service hotel portfolio will generate adequate cash flow to support the ratings, despite the more challenging lodging environment since the Sept. 11 terrorist attacks and the slowing economy.

While the cushion available to meet senior note interest is expected to decline somewhat, S&P said it believes the amount remains adequate, given expectations for cash flow, and the added structural benefit to holders as a result of the subordination of certain operating fees and expenses payable to Marriott International Inc.

Moody's cuts Iasis outlook to negative

Moody's Investors Service lowered its outlook on of Iasis Healthcare Corp. to negative from stable and confirmed the company's ratings including its $455 million bank credit facilities at B1 and its $230 million 13% senior subordinated notes due 2009 at B3.

Moody's said its action is in response to Iasis' disappointing results for the quarter ended Dec. 31, 2001.

"Iasis's performance continues to be negatively impacted by problems in the Arizona market, which has seen a continued slide in admissions and length of stay," Moody's said.

But even excluding Arizona, the company's volume trends have weakened from recent quarters, the rating agency noted.

In addition, costs have increased and liability and benefits expenses reduced EBITDA by over $3 million compared to the prior year quarter, Moody's added.

S&P downgrades Advanced Lighting

Standard & Poor's downgraded Advanced Lighting Technologies Inc., removed the ratings from CreditWatch where they were placed on Dec. 19, 2001 and assigned a negative outlook. Ratings affected include Advanced Lighting's $100 million 8% senior notes due 2008, cut to CCC from B- and its $50 million credit facility, cut to B- from B+.

S&P said it lowered the ratings because of Advanced Lighting's weaker-than-expected operating performance, significantly deteriorating credit protection measures, heavy debt burden and very constrained liquidity.

Over time S&P expects the debt reduction following Advanced Lighting's recent sale of its lighting fixture business along with cost-saving actions in the first quarter of fiscal 2002 will lead to better credit protection measures but says the improvement may be delayed due to the current challenging economic environment.

S&P lowers Luigino's outlook to stable

Standard & Poor's revised its outlook on Luigino's Inc. to stable from positive and confirmed its ratings including its corporate credit at B+.

S&P said the change reflects its belief that Luigino's credit measures will remain appropriate for the current rating, given the company's expected use of debt for its acquisitive growth strategy.

S&P said Luigino's has relatively high debt levels following its recapitalization and subsequent debt-financed purchase of The All-American Gourmet Co. and Budget Gourmet name brands from Heinz.

However the rating agency also noted the company's strong position in the highly competitive frozen entrιe segment in North America.

S&P puts PDVSA, Petrozuata on negative watch

Standard & Poor's put Petroleos de Venezuela S.A., PDVSA Finance Ltd. and Petrozuata Finance Inc. on CreditWatch with negative implications.

S&P said its action follows the placement of the foreign currency sovereign credit rating of PSVSA's owner, the Bolivarian Republic of Venezuela, on CreditWatch with negative implications. The placement of Venezuela on watch "follows political actions that have led to material capital flight and high real interest rates at a time of unfavorable external conditions for Venezuela due to lower oil prices and export volumes," S&P said.

For PDVSA Finance, S&P said changes to ratings of the company's notes will depend on changes in the level of sovereign risk and the extent to which the structure mitigates that risk.

"While a downgrade of the sovereign would not trigger an automatic downgrade of PDVSA Finance, the level of political control and influence of PDVSA by the government, as most recently evidenced by the appointment by the government of PDVSA's fourth president in three years, makes such an action likely," S&P said.

For Petrozuata, S&P said the developments in Venezuela have increased the risk of adverse government involvement in Petrozuata and the other Orinoco Belt heavy oil upgrade projects, including Cerro Negro Finance Ltd. and Sincrudos de Oriente Sincor CA.

Ratings affected include: PDVSA Finance Ltd.'s $3.6 billion and €200 million of notes rated BBB-; Petrozuata Finance Inc.'s $300 million 7.63% bonds series A due 2009, $625 million 8.22% bonds series B due 2016 and $75 million 8.37% bonds series C due 2022, all rated BB; CITGO Petroleum Corp.'s $200 million 7.875% senior notes due 2006 rated BB; and PDV America Inc.'s $500 million 7.875% notes due 2003 rated B+.

S&P cuts Carrier1 notes to D

Standard & Poor's lowered its ratings on Carrier1 International SA's $160 million of 13.25% senior notes due 2009 and €85 million 13.25% notes due 2009 to D from C.

S&P puts Electricidad de Caracas on negative watch

Standard & Poor's put CA La Electricidad De Caracas on CreditWatch with negative implications.

Ratings affected include the company's €150 million notes due 2006 rated B.

S&P rates Polypore bank loan B+

Standard & Poor's assigned a B+ rating to Polypore Inc.'s $160 million term C bank loan due 2007.

S&P upgrades Printpack

Standard & Poor's upgraded Printpack Inc. and assigned a BB rating to its new bank loan. The outlook is now stable.

Ratings affected include Printpack's $100 million 9.875% senior notes due 2004, raised to BB- from B+ and its $200 million 10.625% senior subordinated notes due 2006, raised to B+ from B. Printpack Holdings Inc.'s $100 million revolving credit facility due 2007, $100 million term A due 2007 and $200 million term B due 2009 are rated BB.

S&P cuts Kaiser Aluminum notes to D

Standard & Poor's downgraded Kaiser Aluminum & Chemical Corp.'s $225 million 9.875% senior notes due 2002 and its $175 million 10.875% senior notes due 2006 to D from CC.

S&P ugprades some Hercules notes

Standard & Poor's upgraded some of Hercules Inc.'s notes and put the company on CreditWatch with positive implications. It had previously been on CreditWatch with developing implications.

Ratings affected include Hercules' $125 million 6.625% senior secured notes due 2003 and $100 million 6.6% notes due 2027, both raised to BB from BB-; its $900 million revolving credit facility due 2003, its $1.25 billion term loan A due 2003 and its $375 million term loan D due 2005, confirmed at BB; its $400 million 11.125% senior notes due 2007, confirmed at B+; Hercules Trust I's $350 million 9.42% trust originated preferred securities confirmed at B; and Hercules Trust II's $350 million preferred securities confirmed at B.

Moody's puts Agrokor on review for downgrade

Moody's Investors Service put Agrokor dd's Ba3 senior implied and issuer ratings on review for possible downgrade.

Moody's said the review will look at Agrokor's plans to expand its food retail franchise together with an assessment of its growth strategy both regionally and nationally.

Moody's puts Statia Terminals on upgrade review

Moody's Investors Service put Statia Terminals International NV's ratings on review for upgrade and assigned a Baa3 senior unsecured rating to the proposed debt offering of the company that it is acquiring it, Kaneb Pipe Line Operating Partnership, LP. Kaneb's outlook is stable.

Moody's said that if the acquisition closes on the terms and in the timeframe expected Statia's first mortgage notes will be raised to Ba1 from B1. The notes will not be assumed or guaranteed by Kaneb.

Moody's downgrades Concordia Bus

Moody's Investors Service downgraded Concordia Bus AB. Ratings lowered include Concordia's €100 million subordinated notes, cut to B3 from B2, and the secured multi-currency term loan and credit facility of Swebus AB to B1 from Ba3. The outlook is negative.

Moody's said its action reflects the weaker than expected cash flow generation compared to the original management plan as a result of higher diesel expenses, lower than budgeted cost savings and losses from pre-acquisition contracts.

Concordia has made slow progress in deleveraging compared to the original management plan and faces a tight liquidity situation because of underperformance in cost savings, a tight debt amortization schedule and significant growth, Moody's said

The weak operating margins were largely caused by higher diesel cost, devaluation of the Swedish currency and rises in labor cost which could not be passed on to the local transportation authorities, Moody's added.

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