S&P downgrades Williams Communications, still on watch

Standard & Poor's downgraded Williams Communications Group Inc. and kept the ratings on CreditWatch with negative implications. Ratings affected include Williams Communications' $500 million seven-year amortizing secured senior term loan and $500 million six-year senior secured reducing revolving credit facility, both cut to C from CCC+; its $1.5 billion 10.875% senior notes due 2009, $575 million 11.7% senior redeemable notes due 2008, $425 million 11.875% senior reedemable notes due 2010 and $575 million 11.7% senior redeemable notes due 2010, all cut to C from CCC-; and its $250 million redeemable cumulative convertible preferred stock, cut to C from CC.

S&P said it cut Williams Communications' ratings after the company said it was considering filing for Chapter 11 bankruptcy or undertaking other measures to restructure its balance sheet.

"The active consideration of a bankruptcy filing or a debt restructuring runs contrary to William Communications' recent publicly announced intentions," S&P noted, adding that if the company chooses one of these options all its ratings will be lowered to D.

Moody's downgrades Broadwing

Moody's Investors Service downgraded of Broadwing, Inc. and its subsidiaries, affecting $3.8 billion of debt. Ratings lowered include Broadwing, Inc.'s $900 million revolving credit facility, $750 million term loan A, $450 million term loan B, $200 million term loan C, all lowered to Ba3 from Ba1, its $50 million senior secured notes, lowered to Ba3 from Ba2, its $400 million convertible subordinated debt, lowered to B2 from Ba3, its $155 million 6.75% series B perpetual convertible preferred stock, lowered to B3 from B1; Broadwing Communications Inc.'s $46 million senior subordinated debt, lowered to B3 from B1, and $395 million 12.5% junior exchangeable preferred stock due 2009, lowered to B3 from B1; and Cincinnati Bell Telephone Co.'s $150 million senior unsecured debentures, lowered to Ba1 from Baa3, and $140 million guaranteed medium term notes, lowered to Ba1 from Baa3. The outlook is stable.

Moody's said it lowered Broadwing's ratings in response to the company's recent operating performance and 2002 guidance that fall short of the rating agency's expectations.

Moody's said it is also concerned Broadwing's operating growth will likely be further hampered by the troubles affecting the emerging wireline telecom sector.

"Given slower than expected market demand for fiber services and persistent broadband pricing pressure, Moody's foresees further stress on the company's broadband business in the near future," Moody's added. "This is of particular concern, since we had earlier considered broadband to be the growth-engine driving Broadwing's overall business model. "

Fitch downgrades Williams Communications

Fitch Ratings downgraded Williams Communications Group, Inc., including lowering its senior unsecured debt to CC from CCC- and its convertible preferred stock to C from CC and Williams Communications, Inc.'s senior secured credit facility to CCC- from CCC+. All ratings remain on Rating Watch Negative.

Fitch said it lowered Williams Communications' debt because of concern that one potential outcome of the company's ongoing discussions with its bank group over restructuring its debt could result in a default.

Williams Communications announced Monday that it has expanded the scope of the restructuring options it is considering to include a Chapter 11 reorganization.

S&P downgrades Call-Net

Standard & Poor's downgraded Call-Net Enterprises Inc. and put it on CreditWatch with negative implications. Ratings affected include Call-Net's C$100 million 8.375% notes due 2007, $170 million 9.27% senior discount notes due 2007, $436 million 8.94% discount notes due 2008, $175 million 8% notes due 2008, $450 million 9.375% senior notes due 2009 and $385 million 10.8% senior discount due 2009, all lowered to CC from B+.

S&P said its action follows Call-Net's announcement of an exchange of new notes, cash and equity for its C$2.6 billion of senior unsecured notes carrying coupons ranging from 8.0% to 10.8%, maturing between 2007 and 2009.

On completion of the exchange, S&P said it will lower Call-Net's corporate credit rating to SD and the senior unsecured debt rating to D.

Under S&P policy, completion of the exchange will be tantamount to a default because bondholders will be receiving less than par.

S&P upgrades Entercom, rates new notes B+

Standard & Poor's upgraded Entercom Communications Corp. and assigned a B+ rating to the proposed $150 million drawdown of subordinated notes due 2014 of Entercom Radio LLC and Entercom Capital Inc. Ratings lifted include Entercom Communications Capital Trust $125 million 6.25% convertible preferred TIDES, raised to B from B-, Entercom Radio LLC's $325 million senior secured revolving credit facility due 2007 and $325 million senior secured term loan A due 2007, raised to BB from BB-.

S&P said it upgraded Entercom because of improvement in its financial profile, progress boosting performance at acquired radio stations and its broadening base of operation.

In addition, despite declining ad revenue, good discretionary cash flow enabled Entercom to repay debt and reduce leverage last year, S&P said.

S&P also expects Entercom to continue to use equity to temper the financial risk of its radio station acquisition strategy.

S&P downgrades MPower, still on watch

Standard & Poor's downgraded MPower Communications Inc. and kept it on CreditWatch with negative implications. Ratings affected include MPower's $160 million 13% senior secured notes due 2004 and $250 million 13% senior notes due 2010, both lowered to C from CCC.

S&P said its action follows MPower's announcement that it has reached agreement on a recapitalization plan with an informal committee representing about 66% of its senior notes.

If MPower files for Chapter 11, as intended, the ratings will be lowered to D, S&P added.

Newcor files for Chapter 11

Newcor, Inc. said it made a voluntary Chapter 11 filing in the U.S. Bankruptcy Court in Wilmington, Del.

The Bloomfield Hills, Mich. rubber and plastic products company said it made the bankruptcy filing because of the need to reduce debt which is "severely impacting" its ability to return to profitability and to benefit from converting debt to equity.

Newcor aims to emerge from Chapter 11 in late 2002.

Fitch cuts Nuevo outlook to stable

Fitch Ratings lowered its outlook on Nuevo Energy Co. to stable from positive and confirmed the company's senior subordinated rating at B.

Fitch said it was lowering the outlook because of Nuevo's limited credit improvement following two very strong years of commodity prices.

At year-end 2001, EBITDAX/interest, was 2.7 times and total debt/EBITDAX was 3.4 times, Fitch said, adding: "An ill-timed hedging policy negatively impacted revenue and EBITDAX by more than $50 million in 2001. This follows the $150 million in lost revenue in 1999 & 2000."

As a result, the rating agency continued, Nuevo did not improve its balance sheet like many of its peers in the past two years.

Moody's downgrades Aetna Industries

Moody's Investors Service downgraded Aetna Industries, Inc. after it filed for Chapter 11. The outlook is negative. Ratings lowered include Aetna's $85 million 11.875% guaranteed senior notes due October 2006, cut to Ca from B3.

Moody's said that Aetna's Chapter 11 filing indicated a sale of its business is likely which could result in "some" recovery for holders of the notes.

S&P lowers KoSa outlook

Standard & Poor's lowered its outlook on KoSa BV to negative from stable and affirmed its ratings, including its corporate credit at BB+.

S&P said it revised KoSa's outlook because of concerns about its recent operating performance, the result of a weaker-than-expected recovery in PET packaging resins and diminished operating profits from the intermediates and polymers segment due to softening demand.

"These issues have resulted in a modest deterioration to the firm's already sub-par credit statistics, and indicate that the improvements necessary to support the current ratings could take longer than previously anticipated," S&P said.

S&P puts KazTransOil on negative watch

Standard & Poor's put KazTransOil on CreditWatch with negative implications including its $150 million 8.5% notes due 2006 rated BB.

S&P downgrades Luxfer

Standard & Poor's downgraded Luxfer Holdings PLC including lowering its £160 million 10.125% bonds due 2009 to B- from B. The ratings were removed from CreditWatch with negative implications.

Moody's downgrades HCC Industries

Moody's Investors Service downgraded HCC Industries Inc. and lowered the outlook to negative from stable. Ratings affected include HCC's $80 million of 10.75% senior subordinated notes due 2007, cut to Caa3 from Caa1.

Moody's said the downgrade reflects HCC's deteriorating performance, its failure to renew the contract with its largest customer, SDI, representing about 25% of sales, and its constrained financial flexibility.

During the first nine months of fiscal 2002, HCC experienced considerable weakness across its major end-markets, e.g. aerospace, petro-chemical, automotive and telecom, Moody's said.

In particular, the rating agency added, HCC has been hit by the major auto manufacturers' latest drive to obtain price concessions from their suppliers; HCC recently disclosed it had failed to renew the contract with SDI as it was unwilling to meet the pricing demands.

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