Moody's cuts TXU to junk

Moody's Investors Service downgrade TXU Corp. to junk and lowered some of its subsidiaries while confirming others.

Ratings affected are TXU Corp.'s senior unsecured debt, cut to Ba1 from Baa3, Pinnacle One, cut to Ba2, Oncor Electric Delivery's secured debt, cut to Baa1 from A3, TXU US Holdings' preferred stock, cut to Ba2, TXU Gas, cut to Baa3 from Baa2, TXU Energy's senior secured debt confirmed at Baa2, TXU US Holdings' bank loan confirmed at Baa3.

The outlooks for TXU Corp. and for TXU Gas are negative, the outlooks for Oncor, TXU Energy and TXU US Holdings are stable.

Moody's said it lowered TXU Corp. because of the structural subordination to the bank loans at TXU US Holdings.

Moody's noted management's intent to focus on debt repayment at the holding company over the medium term. In addition, the liquidity situation throughout the system is reasonable.

The negative outlook reflects any potential litigation involving creditors of TXU Europe, the subsidiary which is now in administration.

Moody's noted TXU drew on TXU US Holdings' two bank loans, a $1 billion 364-day facility due April 2003 (with a one-year term out) and a $1.4 billion term facility due April 2005, in October to commence an orderly exit from the commercial paper markets following recent negative credit events.

The rating for TXU US Holdings is notched down to Baa3 from the Baa2 assigned to its primary subsidiary, TXU Energy, Moody's said. Moody's cut TXU US Holdings preferred stock to reflect the weaker priority of claims relative to the bank debt.

Moody's said it confirmed TXU Energy's ratings to reflect its solid cash flow generation in relation to its debt. TXU Energy provides a source of free cash flow to its parent and has a controlled exposure to trading and marketing.

Moody's lowered Oncor's secured rating to reflect inter-company funds flows from TXU Energy to Oncor. The flows result from regulatory requirements that TXU Energy make Oncor whole for costs involved in securitizing regulatory assets, and returning excess depreciation of generating assets to customers (the "excess mitigation credit".) The lowering of the Oncor rating acknowledges the interdependency of these two companies, Moody's said.

The downgrade to TXU Gas reflects the company's persistent low profitability, and consequently, its poor returns and low debt coverage measures.

S&P confirms AES, off watch, lowers some notes

Standard & Poor's confirmed AES Corp., lowered its senior unsecured notes and removed it from CreditWatch with negative implications. The outlook is negative. Ratings confirmed include AES' $1.62 billion senior secured bank facility at BB, $350 million senior secured exchange notes at BB, subordinated debt at B- and trust preferred securities at CCC+. AES' senior unsecured notes were cut to B- from B+.

S&P said it confirmed AES after the company announced its closing of its senior secured bank facility and senior secured exchange notes maturing December 2005.

The closing lifts the immediate threat of insolvency, and provides AES with the ability to focus on its goal of improving credit by selling assets and paying down parent-level debt to a more manageable level, and by improving operations at its operating businesses, S&P said.

The lower rating on the unsecured notes reflects their disadvantaged position relative to the newly secured senior notes, S&P added.

The negative outlook reflects the need for AES to execute on this plan over the course of the next two to three years, as well as the uncertainty surrounding the outcome of negotiations with BNDES regarding approximately $900 million of debt maturities at AES Elpa and AES Transgas, the holding companies of Eletropaulo, in 2003, and indenture provisions that may allow unsecured holders at AES Corp. to accelerate under certain bankruptcy events at material subsidiaries, S&P said. Such subsidiaries currently include AES Drax and CA Electricidade de Caracas, and will likely soon include Eletropaulo according to AES Corp.

S&P said it estimates that AES' liquidity will stand at about $150 million given the close of the transaction and the payoff of the December 2002 notes that were not tendered.

S&P also estimates FFO/interest coverage in 2003 of between 1.5x and 1.7x and FFO/Debt of 14%-15% given a range of projected distributions from subsidiaries from $900 million to $1.0 billion.

Assuming capital expenditures of $200 million, S&P expects free cash flow, excluding any proceeds from asset sales, of $50 million to $150 million. If asset sales and debt paydowns are executed, these metrics would change depending on the amount of debt paid down and the cash flows forgone by asset sales.

S&P confirms AES Eastern, off watch

Standard & Poor's confirmed AES Eastern Energy LP's $550 million passthrough certificates and $35 million working capital facility at BB+ and removed them from CreditWatch. The outlook is negative.

S&P said the action is solely a result of a similar action taken on AES Corp.

S&P confirms Ipalco

Standard & Poor's confirmed Ipalco Enterprises Inc. including its senior unsecured debt at BB- and Indianapolis Power & Light Co. including its senior secured debt at BB+, senior unsecured debt at BB- and preferred stock at B+ and removed all ratings from CreditWatch with negative implications. The outlook is negative.

S&P said the action is solely a result of a similar action taken on AES Corp.

S&P lowers Resolution Performance outlook, rates notes B

Standard & Poor's lowered its outlook on Resolution Performance Products LLC to negative from stable and assigned a B rating to its proposed $50 million senior subordinated notes due 2010. S&P also confirmed its existing senior secured debt at BB- and subordinated debt at B.

S&P said it lowered the outlook on Resolution Performance Products because of the company's sub-par financial profile.

The rating agency added that it is concerned that weaker-than-expected operating performance could make it more difficult for the company to reduce debt and strengthen credit protection measures in the near term.

Profitability and cash flow have been negatively affected by the continuation of difficult industry conditions, S&P said. Consequently, Resolution Performance Products' financial profile will likely remain sub-par longer than had been anticipated.

The ratings confirmation reflects the company's efforts to reduce costs and pay down debt during a difficult operating environment, as well as good liquidity aided by the proposed transaction, S&P added.

S&P puts H&E on watch

Standard & Poor's put H&E Equipment Services LLC on CreditWatch with negative implications including its $150 million revolving credit facility due 2007 at BB and $200 million 11.125% secured notes due 2012 at B.

S&P said its action is in response to H&E's weaker-than-expected performance, stemming from weak operating conditions in construction markets in the U.S.

Demand for rental equipment slowed beginning in fiscal 2001 and through 2002 due to declines in construction spending, S&P noted. The equipment rental industry will remain challenging through 2003, with near-term rental revenue expected to remain relatively flat. Longer term, growth is expected from the continued outsourcing trends and efforts by customers to reduce fixed-capital investments.

Sales for H&E were off by 16% through the first nine months of 2002, on a comparable basis with prior year, mainly due to declines in new and used equipment sales, as revenues for equipment rentals were off by 5%, S&P said. In addition, H&E Equipment's balance sheet is highly leveraged, with total debt to EBITDA at more than 4x on a pro forma combined basis. S&P expected total debt to EBITDA to average about 3x over the intermediate term.

Moody's cuts Jasmine Submarine

Moody's Investors Service downgraded Jasmine Submarine Telecommunications Co.'s $132 million senior secured notes due 2011 to B2 from Ba3. The outlook is stable. The action concludes a downgrade begun on Oct. 5.

Moody's said the downgrade is in response to concerns about Jasmine Submarine's continuing ability to service its U.S. dollar-denominated debt obligations; the potential impact on Jasmine Submarine's continuing operations should its parent, Jasmine International Public Co. Ltd. enter bankruptcy; and the ability of Telephone Organization of Thailand to honor its contractual obligations with Jasmine Submarine post any privatization.

The potential privatization of TOT should not affect the contracts, although the strength of TOT from a counter-party risk perspective may diminish. Additionally, the likelihood of revenue growth is limited given current market conditions, Moody's said.

The rating also considers the relative predictability of cash flows provided by a fixed revenue stream in Thai Baht from the TOT, based on contracted capacity, as well as the current ability of TOT to meet its obligations, Moody's added. The minimum amount of contractual payments is sufficient to ensure repayment of the bond and, pursuant to the TOT Act, the Thai Government underwrites TOT's obligations.

Moody's said it understands that Jasmine International is currently seeking to renegotiate with its creditors, presenting the possibility that it may enter bankruptcy.

S&P puts Burns Philp on watch

Standard & Poor's put Burns, Philp & Co. Ltd. on CreditWatch with negative implications including its corporate credit rating at BB-.

S&P said the watch placement follows the announcement that a wholly owned subsidiary, BPC1 Pty. Ltd., has acquired a 14.9% stake in diversified food and food ingredient manufacturer Goodman Fielder Ltd. with a view to making a takeover bid.

The bid stands at A$1.85 per share, and the transaction will be funded through a combination of A$770 million cash, new debt, and the proceeds from the exercise of equity options, S&P noted.

If the bid is successful, S&P said it expects Burns Philp's post-transaction total debt-to-total capitalization ratio to exceed 90%, its funds from operations-to-total debt ratio to be about 10%, and its interest coverage ratio to be below 1.5x.

The rating on Burns Philp could be lowered by one or two notches if the bid is successful, S&P said.

S&P puts DynCorp on positive watch

Standard & Poor's put DynCorp on CreditWatch with positive implications including its $100 million term loan A, $100 million term loan B and $90 million revolver at BB- and its $100 million 9.5% senior subordinated notes due 2007 at B.

S&P said the watch placement follows the announcement that DynCorp is being acquired by A-rated Computer Sciences Corp. DynCorp's debt will be assumed by Computer Sciences.

At the close of the transaction, expected by March 2003, S&P said it will raise DynCorp's ratings to reflect the ratings of its new parent.

S&P says Broadwing unchanged

Standard & Poor's said Broadwing Inc.'s ratings remain unchanged including its corporate credit rating of B- on CreditWatch with negative implications following news that the company has a commitment for $200 million in financing in the form of senior subordinated discount notes due 2009.

The commitment is contingent upon Broadwing successfully renegotiating its current bank credit facility and the satisfaction of various closing conditions.

The moderate commitment of financing does not significantly address three challenges that Broadwing faces, S&P said.

First, without obtaining a material extension of the bank amortization schedule and favorable amendments to maintenance covenants through its current bank negotiation process, Broadwing faces substantially increased risk of having a liquidity issue in 2003, S&P said. Second, challenges that are causing its long-haul data business, Broadwing Communications Inc., to negatively affect consolidated free cash flows are likely to persist for some time. Broadwing Communications faces industry overcapacity and is exposed to a number of customers with risky financial profiles.

Third, even assuming that Broadwing Communications is divested or successfully restructured, Broadwing may not be able to materially reduce its debt level for several years given the relatively small size of free cash flows generated by its healthy local incumbent and wireless businesses, S&P said.

S&P cuts PDVSA

Standard & Poor's downgraded Petroleos de Venezuela SA including cutting its corporate credit rating to CCC+ from B-. The outlook is negative.

S&P said the downgrade to PDVSA reflects the downgrade of the Bolivarian Republic of Venezuela. Future ratings changes will be linked to those on Venezuela, S&P added.

The ratings downgrade also reflects the near paralysis of PDVSA's operations caused by labor unrest and political tensions within Venezuela, S&P said. In recent days, PDVSA's production volumes reportedly have fallen by about 70% and little to no oil and refined products have been exported. PDVSA has declared force majeure on all crude oil supply contracts and risks a near complete operational shut-down if storage capacity fills before PDVSA's export capability is restored.

S&P said it believes the operational disruptions are straining PDVSA's financial position. Although PDVSA appears to have cash balances (about $360 million plus access to about $3 billion in the FIEM) plus available incremental bank credit (more than $300 million at its wholly owned subsidiary Citgo Petroleum Corp.) that exceed debt payments through March 2002 (about $370 million), S&P said it is nevertheless concerned that trade and financial debt payments could be missed or deferred if the company's operations do not normalize in the near future.

The manner in which the political impasse could be resolved remains uncertain as the opposition stiffens its resolve and President Chavez hardens his position, S&P added. If an agreement were reached that normalizes operations but does not provide for a lasting solution to Venezuela's political tensions, S&P said it is concerned about the fallout on PDVSA's ability to raise external capital and access trade credit.

S&P cuts Petrozuata

Standard & Poor's downgraded Petrozuata Finance Inc. and kept it on CreditWatch with negative implications. Ratings lowered include Petrozuata'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 cut to B+ from BB-.

S&P said the downgrade follows its downgrade of the Bolivarian Republic of Venezuela to CCC+ from B-. The rating outlook for Venezuela is negative. The downgrade and negative outlook on the sovereign reflects the increasing probability of default given the environment of growing political polarization, critical social divisions and economic paralysis due to the ongoing strikes. The manner in which the political impasse could be resolved remains uncertain as the opposition stiffens its resolve and President Chavez hardens his position, S&P said. Removal of President Chavez would likely lead to a heightened mobilization of his supporters and result in increased violence.

The continued placement of the Petrozuata bonds on CreditWatch reflects the negative developments in Venezuela that have begun to and that could continue to disrupt Petrozuata's production, transport, and processing of heavy crude oils and its export of synfuel products, S&P said. The developments include a strike by management and employees of PDVSA, which has led to a large reduction in domestic production and refining, and a large drop in exports of crude oil and refined products, and growing civil unrest between the government and opposition groups.

S&P cuts Harvest Natural Resources

Standard & Poor's downgraded Harvest Natural Resources Inc. including cutting its $115 million 9.375% senior notes due 2007 to CCC+ from B-. The outlook remains negative.

S&P said the action follows its downgrade of the long-term foreign currency rating of the Bolivarian Republic of Venezuela to CCC+.

Harvest relies on its operations in Venezuela and its service agreement with Petroleos de Venezuela SA for essentially all of its operating cash flow, S&P said. The company's ratings are constrained by the political risk attendant to its operations in Venezuela.

Despite the general strike in Venezuela, production from the South Monagas Unit has not been interrupted and is currently producing about 27,000 barrels per day (bpd). However, as of Dec. 9, 2002, PDVSA has reduced purchases to 18,000 bpd, with the balance of production being placed in storage, S&P said. Harvest indicated that it has about nine days of storage capacity available before production would be affected.

S&P cuts PDVSA Finance

Standard & Poor's downgraded PDVSA Finance Ltd. and kept it on CreditWatch with negative implications including its $3.6 billion and €200 million senior unsecured notes, cut to BB from BB+.

S&P said the action follows the lowering of Bolivarian Republic of Venezuela's long-term foreign currency rating to CCC+ from B-, and the subsequent lowering of Petroleos de Venezuela SA's (PDVSA) foreign currency rating to CCC+ from B-. PDVSA Finance is a wholly owned subsidiary of PDVSA. The negative outlooks on the sovereign and PDVSA have been maintained.

The downgrade of the PDVSA Finance notes reflects recent severe and continuing oil production and export shortfalls stemming from a strike that began on Dec. 2, S&P said. As a result of these strikes, the Venezuelan economy is estimated to be losing about $50 million a day in export revenues at a time when the government is under increasing financial and political pressure.

S&P said it is concerned that the government, which receives a substantial portion of its revenues from the export of PDVSA's oil production, may have an increased incentive and willingness to interfere in the offshore cash-trapping mechanism of the structure.

Although the strike continues and little oil is being exported at this time, the offshore transaction collection account is expected to be fully funded from shipments made prior to the strike so that the next quarterly debt service payment due in February 2003 can be made without any drawdown from the transaction liquidity reserve, S&P said. With the liquidity reserve fully funded and available to cover the May 2003 payment if necessary, the structure is well protected even if the export disruption continues for several weeks or months.

Nevertheless, it is uncertain how long it will take for the political and economic crisis to stabilize, and for PDVSA to begin operating at normal levels without further risk of disruptions to its production facilities and exports, S&P said. Consistent with S&P's policy to maintain a strong link between the foreign currency rating of the sovereign and a country's public sector entities, the rating has been lowered to maintain the existing five-notch enhancement above the sovereign's foreign currency rating.

Fitch upgrades Kamps

Fitch Ratings upgraded Kamps AG's senior unsecured debt to BB from BB- and removed it from Rating Watch Positive, where it was placed on April 23, 2002. The outlook is stable.

Fitch said the upgrade follows meetings held with management of both Kamps and the new shareholder, Barilla group, and reflects the stronger profile of the group following its takeover by Barilla.

Although financial ratios remain stretched and profit margins have weakened due to the difficult economic environment in Germany, secured debt has been replaced with unsecured funding.

Fitch said it believes that with Barilla as a shareholder, Kamps will benefit from cross-selling opportunities, transfer of best practice and stronger financial discipline. The appointment of a new CFO before the takeover and the arrival of a new CEO in January 2003 are also expected to have a positive influence.

Despite the overall resilience of Kamps' portfolio of bakery products to the economic downturn in sales terms, margins have been under pressure, Fitch said. Coupled with a balance sheet clean-up being conducted by the new management and extraordinary costs incurred in conjunction with the takeover, both profitability and cash generation are expected to be significantly reduced for fiscal 2002.

Consolidated fiscal 2001 net debt/EBITDA of 4.1x and EBITDA/net interest of 3.5x are expected to deteriorate in fiscal 2002 respectively to just under 6.0x and little above 2.0x, and to improve only slightly in fiscal 2003, Fitch added.

S&P raises Oshkosh Truck to investment grade

Standard & Poor's upgraded Oshkosh Truck Corp. to investment grade including raising its corporate credit rating to BBB- from BB+, $140 million term loan B due 2007, $170 million revolver due 2006 and $60 million term loan due 2006 to BBB- from BB+ and its $100 million 8.75% senior subordinated notes due 2008 to BB+ from BB-. The outlook is stable.

S&P said the upgrade reflects Oshkosh's improving operating performance, which has enabled it to generate $248 million of free cash flow in fiscal 2002 ended Sept. 30, and its more moderate financial policy, with total debt to EBITDA of 1.3x at year-end 2002.

Although the company is expected to continue to pursue both niche and strategic acquisitions, and may need to build up working capital if it wins one or more large defense awards, the ratings incorporate a meaningful amount of debt capacity, as S&P expects total debt to capital to average around 50% (currently 32%), and pro forma total debt to EBITDA in the 2.5x area over the business cycle.

Oshkosh Truck's ratings reflect its leading business positions in niche segments of the specialty truck markets, a moderate financial policy, and its satisfactory liquidity.

Fitch puts DynCorp on positive watch

Fitch Ratings put DynCorp's $100 million 9½% senior subordinated notes due 2007 rated B on Rating Watch Positive.

Fitch said the action follows the announcement that DynCorp will be acquired by Computer Sciences Corp. for $950 million, including the assumption of DynCorp's estimated $270 million in total debt.

As of the third quarter of 2002 ending Sept. 26, 2002, DynCorp continues to report improving financial results, Fitch noted. For the first nine months of 2002, DynCorp's revenues were $1.7443 billion, up 23% from the prior-year comparable period.

S&P cuts Energy Corp.

Standard & Poor's downgraded Energy Corp. of America including cutting its $200 million 9.5% senior subordinated notes due 2007 to CCC- from CCC+. The outlook remains negative.

S&P said it lowered Energy Corp. because of the company's burdensome debt leverage with limited, near-term prospects for significant deleveraging and a likely decline in liquidity through 2003, as S&P expects Energy Corp. to outspend its internally generated cash flow.

Given the probable cash flow generation of Energy Corp.'s properties, it may be very challenging for the company to continue servicing its debt while averting depletion, S&P said.

Debt leverage is extremely aggressive, with total debt as a percentage of total capital at Sept. 30, 2002 of about 86%, S&P said. Also, substantial uncertainty remains regarding the company's ability to expand its operations into its capital structure. In 2003, weak cash flow protection measures are expected with EBITDA interest coverage of between 1.0x and 2.0x.

In 2003, internal cash flow will be insufficient to fund interest charges (projected to be about $17 million) and budgeted capital expenditures of $39 million, likely causing leverage to rise and financial flexibility to materially weaken, S&P said.

The negative outlook for Energy Corp. reflects continued uncertainty regarding the company's operational and financial condition, S&P added.

Fitch rates Boyd notes B+

Fitch Ratings assigned a B+ rating to Boyd Gaming Corp.'s new $300 million senior subordinated notes due 2012. The outlook is stable.

Boyd's ratings reflect the company's diversified property portfolio, strong operating performance and successful history of absorbing acquisitions, Fitch said.

The company's leverage remains consistent with the rating category, although further debt reduction is anticipated in the short term, Fitch added. Over the intermediate term risk factors include the potential for debt-financed acquisitions and projected moderate levels of share repurchases.

Aided by the May 2001 Delta Downs acquisition and strong core property performance, Boyd has posted meaningful margin expansion over the past several years, Fitch noted. For the nine months ended Sept. 30, 2002, Boyd produced EBITDA growth in seven of its eight operating segments. The commencement of slot operations at Delta Downs in February 2002 has been a meaningful contributor to consolidated growth.

Strong cash flows and reduced capital investments have resulted in healthy free cash flow and improved financial statistics, Fitch said. Last 12 months debt/EBITDA has improved to 4.1 times at Sept. 30, 2002, while interest coverage has improved to 2.9x from 2.4x for the full year 2001.

Moody's rates Chesapeake notes B1

Moody's Investors Service assigned a B1 rating to Chesapeake Energy Corp.'s $150 million senior unsecured notes due 2014 and confirmed its existing ratings including its $42 million 7.875% senior unsecured notes due 2004, $250 million 8.375% senior unsecured notes due 2008, $800 million 8.125% senior unsecured notes due 2011 and $143 million 8.5% senior unsecured notes due 2012 at B1 and its $150 million 6.75% convertible preferred at Caa1. The outlook remains positive.

The ratings follow Chesapeake's $300 million acquisition of 195.7 bcfe of primarily natural gas reserves from ONEOK Inc., to be funded with proceeds from the new notes and the issuance of 20 million shares of common stock.

The ratings reflect the continued step up in scale of long-lived Mid-Continent reserve base, while also taking into account high leverage from increases in debt to fund acquisitions, Moody's said.

The outlook is subject to a review of year-end 2002 reserve levels and the components of reserve additions and replacement costs in 2002, Moody's added.

S&P cuts Giant Industries

Standard & Poor's downgraded Giant Industries Inc. including cutting its $150 million 9% senior subordinated notes due 2007 and $200 million 11% senior subordinated notes due 2012 to B- from B. The outlook remains negative.

S&P said the negative outlook reflects its view that additional deterioration in the company's financial profile could trigger another ratings downgrade.

The downgrade reflects the prospects for continued, poor refining margins that could lead to deterioration in Giant's financial profile, S&P said, adding that it is concerned over the company's capacity to withstand an ongoing period of poor industry conditions.

A difficult operating environment has resulted in noncompliance with certain covenants in Giant's credit facilities, S&P noted. Although the credit facilities have since been amended, Giant has pledged additional collateral (first-priority liens on the Ciniza and Bloomfield facilities; New Mexico retail stations), limiting future financing alternatives.

In addition, the amendments call for $15 million of asset sales to June 30, 2003 from Oct. 1, 2002 to reduce indebtedness, S&P said. Since the Yorktown acquisition, Giant has sold six retail units for $11.25 million and the company is in the process of selling over 20 retail units in the Phoenix and Tucson areas.

S&P rates Boyd Gaming notes B+

Standard & Poor's assigned a B+ rating to Boyd Gaming Corp.'s new $300 million senior subordinated notes and confirmed the company's existing ratings including its senior secured bank loan at BB+, senior unsecured debt at BB- and subordinated debt at B+. The outlook is stable.

S&P said Boyd's ratings reflect its diversified portfolio of gaming properties, experienced management, and historical ability to generate steady cash flow. Offsetting factors include an aggressive growth strategy during the past few years, a lack of brand identity, and risks related to constructing and opening a new 50%-owned mega-resort, Borgata, in Atlantic City, N.J.

For the nine months ended Sept. 30, 2002, Boyd reported EBITDA of $209 million, an approximately 25% increase over the same period last year, S&P said. Same-store EBITDA (excluding Delta Downs) grew by 16% during this period. Delta Downs, a racetrack in Louisiana, opened its slot machine operations in February 2002.

Excluding Delta Downs, Boyd experienced broad EBITDA growth across its portfolio. In particular, Indiana-based Blue Chip continued its momentum, and Boyd's two Sam's Town properties (Las Vegas and Tunica) have performed well, S&P commented. Due to improved cash flow from operations and a $54 million reduction in debt since March 31, 2002, the company has been able to improve credit measures significantly.

For the 12 months ended Sept. 30, 2002, Boyd's leverage, as measured by total debt to EBITDA, was 4.2x, while EBITDA coverage of interest expense was 2.9x, S&P said. By comparison, as of Dec. 31, 2001, total debt to EBITDA was above 5.0x, and EBITDA coverage of interest was below 2.5x.

Credit measures are expected to continue to improve in 2003, and Boyd is likely to build some cushion for future growth opportunities, S&P said.

S&P puts Jordan on watch

Standard & Poor's put Jordan Industries Inc. on CreditWatch with negative implications including its $104 million 11.75% senior subordinated debentures due 2009 at CCC, $275 million 10.375% senior notes due 2007 at B- and $93 million revolving credit facility due 2006 at B. Kinetek Industries, Inc.'s $50 million revolving credit facility at BB- is not affected by the action.

S&P said the watch placement reflects heightened concerns regarding limited liquidity at the company's restricted group and on its ability to meet near-term interest payments on its debt.

Operating performance has been weak through 2002 and EBITDA generation was insufficient to cover interest expense, at about 0.7x last 12 months (excluding Jordan's ownership of unrestricted subsidiary Kinetek), S&P said.

Prospects for significant improvement are limited in the near term, the rating agency added.

Jordan's restricted group is highly leveraged and liquidity is limited. At Sept. 30, 2002, Jordan's restricted group had about $24 million available under Jordan's revolving credit facility and about $6 million in cash at its restricted subsidiaries, S&P said. Jordan has about $14 million in cash interest payments due February 2003 on its $275 million 10.375% senior notes that mature 2007 and an initial cash interest payment due April 1, 2003, of about $5 million on about $95 million 11.75% subordinated debt that matures in 2009.

Moody's withdraws Versatel ratings

Moody's Investors Service withdrew its ratings on Versatel Telecom International NV after completion of the company's recapitalization which eliminated all its outstanding bond debt.

Moody's withdraws Completel ratings

Moody's Investors Service withdrew its ratings on Completel Europe NV after completion of the company's recapitalization which eliminated all its outstanding bond debt.

Moody's withdraws Jazztel ratings

Moody's Investors Service withdrew its ratings on Jazztel plc after completion of the company's recapitalization which eliminated all its outstanding bond debt.

Moody's withdraws KPNQwest ratings

Moody's Investors Service withdrew its ratings on KPNQwest NV following the liquidation and break up of the company.

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