S&P cuts CNH Global

Standard & Poor's downgraded CNH Global NV including cutting the senior unsecured debt of Case Corp. and Case Capital Corp. to BB- from BB. The ratings were removed from CreditWatch negative. The outlook is stable.

S&P said CNH's ratings reflect equalization with the ratings of its parent company, Fiat SpA, recognizing the importance Fiat attaches to CNH.

Following the sale of a number of business units, Fiat operation's are more focused and it considers CNH, along with the auto and truck operations to be core businesses.

Fiat continues to provide strong liquidity support to CNH, in the way of intercompany loans, and bank loan guarantees and Fiat has increased its ownership to 92% (converted basis) following two debt-for-equity swaps, S&P noted. Previously, CNH's corporate credit rating was one notch below the rating on Fiat. On a stand-alone basis, CNH's rating would now likely be one notch higher than Fiat's rating, reflecting the dramatic improvement in CNH's financial profile following the debt-to-equity swaps.

S&P said it cut the corporate credit rating on Fiat to BB- from BB+, reflecting the expectation that Fiat will not exercise its put to General Motors Corp. for Fiat Auto but instead will make large investments in an effort to turn the auto business around.

Moody's confirms Paiton Funding

Moody's Investors Service confirmed Paiton Energy Funding BV's B3 rating. The outlook is positive.

Moody's said the confirmation follows its decision to put Indonesia's B3 foreign currency country ceiling for debt and the B3 rating of the foreign currency bonds of the government of Indonesia on review for possible upgrade.

Moody's said that says while Paiton's rating is strongly tied to the financial standing of the government of Indonesia and the general economic and political wellbeing of that country, the rating of Paiton is not constrained by the credit rating for the Republic of Indonesia.

The B3 rating reflects the terms of the power contract with PLN, which is on terms acceptable to the Indonesian government, the letter from Minister of Finance reaffirming Government of Indonesia support for the PPA Amendment and the letter from the Minister of Energy and Mineral Resources which determines the electricity price. The rating also reflects the growing power demand in Indonesia, substantial equity commitments already spent by the sponsors and that the plants are now operational.

Moody's also said the positive outlook reflects that the rating could be upgraded if there is a consistently strong track record of operational and financial performance of the project.

Fitch lowers Elektrownia Turow outlook

Fitch Ratings lowered its outlook on Elektrownia Turow SA to negative from stable and confirmed its €270 million guaranteed secured bonds maturing 2011 at BB.

Fitch said the outlook change reflects the the uncertainties, execution risk and likely timing of the government's plan to restructure the power sector in Poland.

Almost all of Elektrownia Turow's revenue base is derived from a long-term PPA with PSE SA, the state-owned transmission grid company, Fitch noted. PPA-backed revenues are used as collateral for 73% of Elektrownia Turow's debt including the 2011 bond. The remaining 17% and 10% of Elektrownia Turow's debt benefit from a state and export guarantee respectively.

The government's restructuring plan for the sector includes the creation of a group, known as BOT, consisting of power plants in Belchatow, Opole and Turow, as well as two lignite mines in Belchatow and Turow, and a cancellation of PPAs for cash compensation.

The rating is supported by the expected maintenance of Elektrownia Turow's existing contractual base until July 2004 and, following this, by a financial and structural solution that is unlikely to materially impair the interests of creditors, to the extent that unanimous consent from creditor parties is required for amendments to the current security package, Fitch said.

Fitch is also mindful of the government's dependence on the willingness of the capital markets to participate in a related transitional levy securitization deal. The agency currently anticipates that an agreed settlement with the relevant secured creditors of Elektrownia Turow and its PPA will be reached prior to any legislative changes. It is understood that such a material change to the PPA could trigger an event of default under Elektrownia Turow's 2011 bond, Fitch said.

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