S&P affirms RCN's rating; removed from CreditWatch

Standard & Poor's affirmed RCN Corp.'s rating of CCC+ and removed the ratings from CreditWatch due to the company's amendment of its credit facility. The outlook is now negative. Affected ratings include the company's notes at CCC- and its bank facility at CCC+. Ratings were placed on CreditWatch on Feb. 8, 2002, after the company announced that it was looking to revise covenants.

Under the amendment, RCN agreed to reduce the amount available under the revolver to $187.5 million from $250 million, to not draw down on the revolver for two years, and to immediately repay $187.5 million of outstanding term loans, S&P said.

"Standard & Poor's still has concerns about the company's weakening liquidity and increased business risks despite the removal of immediate pressure from covenants," S&P said. "Standard & Poor's projects that RCN's liquidity will substantially weaken over the next year due to ongoing operating losses, still sizable capital expenditures, and its lack of access to additional bank credit for two years."

As of the end of 2001, the company had about $1.9 billion total debt outstanding.

S&P downgrades Jazztel

Standard & Poor's downgraded Jazztel plc, took the company off CreditWatch with negative implications and assigned a negative outlook.

Ratings affected include Jazztel's €342.4 million 13.25% notes due 2009, €103.5 million 14% notes due 2009, $86.5 million 14% notes due 2009 and €189.7 million 14% notes due 2010, all cut to C from CCC.

S&P cuts Asia Global Crossing

Standard & Poor's downgraded Asia Global Crossing Ltd. including cuttings its $408 million 13.375% senior notes due 2010 to D from C.

S&P puts Kamps on positive watch

Standard & Poor's put Kamps AG on CreditWatch with positive implications.

Ratings affected include Kamps' €660 million LYONs due 2015, €250 million 8% notes due 2005 and €325 million 8.5% notes due 2009, all rated BB, and its €400 million revolving credit facility due 2007 rated BB+.

S&P takes Varsity Brands off watch

Standard & Poor's confirmed Varsity Brands Inc. and took the company off CreditWatch with negative implications. The outlook is stable. Ratings affected include Varsity Brands' $115 million 10.5% senior notes due 2007 rated B- and $35 million revolving credit facility due 2002 at B+.

S&P said the action reflects Varsity's adequate liquidity and fairly stable, though modest, cash flow following the sale of the Riddell Group Division.

With the sale of the Riddell Group and litigation related to Umbro Worldwide resolved, management can focus on its core cheerleading business that is exhibiting decent growth, S&P added.

Pro forma for the sale of the Riddell Group, total debt outstanding was approximately $81.8 million on Dec. 31, 2001.

Pro forma EBITDA was about $18 million in 2001, and EBITDA coverage of interest expense was about 1.6 times, S&P continued.

S&P lowers Exide Technologies to D

Standard & Poor's downgraded Exide Technologies' corporate credit rating to D from CC following news of the company's filing for Chapter 11. Concurrently, the rating was removed from CreditWatch and the CC senior unsecured debt rating on Exide Holding Europe SA was affirmed and removed from CreditWatch. Exide's existing bank debt, senior notes and convertibles were cut to D from CC.

The company has arranged for $415 million in new financing, including $250 million debtor-in-possession financing. According to S&P, Exide Technologies currently has about $1.4 billion in outstanding debt.

S&P rates Crescent notes B+

Standard & Poor's assigned a B+ rating to Crescent Real Estate Equities , LP's new $375 million of 9.25% senior unsecured notes due2009.

Moody's downgrades Bear Island

Moody's Investors Service downgraded Bear Island Paper Co., LLC and assigned a negative outlook. Ratings affected include Bear Island's $25 million senior secured revolving credit facility due 2003 and $17 million senior secured term loan due 2005, both cut to B3 from B1, and its $100 million senior secured notes due 2007, cut to Caa2 from B3.

Moody's said it cut Bear Island because of continuing losses, weak prices of newsprint, the company's weak liquidity, non-compliance with the financial covenants of its credit agreement and the ability of its lenders to accelerate the debt.

The downgrade further incorporates uncertainty about the degree of future support that the lenders will provide to the company and the lack of indication of whether the shareholders will provide additional capital.

Moody's noted that Bear Island is a small company with one newsprint mill and is dependent upon a few customers with five clients making up 70% of 2001 sales. It also competes with companies that have significantly greater resources in the highly cyclical newsprint market that is commodity in nature.

S&P rates Ventas notes BB-

Standard & Poor's assigned a BB- rating to Ventas Capital Corp.'s $175 million 8.75% senior notes due 2009 and its $225 million 9% senior notes due 2012. The outlook is stable.

S&P downgrades Cone Mills

Standard & Poor's downgraded Cone Mills Corp. including cutting its $100 million 8.125% debentures due 2005 to CCC+ from B-. The rating agency changed the CreditWatch to developing from negative.

S&P rates Champion notes B

Standard & Poor's assigned a B rating to Champion Home Builders Co.'s $150 million of 11.25% senior notes due 2007.

S&P cuts Piccadilly Cafeterias

Standard & Poor's downgraded Piccadilly Cafeterias Inc. and took it off CreditWatch with negative implications. The outlook is stable.

Ratings affected include its $71 million 12% senior secured notes due 2007, cut to B from B+.

S&P puts MTS on developing watch

Standard & Poor's put MTS Inc. on CreditWatch with developing implications. Previously it had a negative outlook on the company.

Ratings affected include MTS' $100 million 9.375% senior subordinated notes due 2005 rated CC and its $225 million revolving credit facility due 2002 rated CCC.

Moody's rates XTO notes Ba2

Moody's Investors Service assigned a Ba2 rating to XTO Energy's proposed $300 million of 10-year senior unsecured notes and confirmed the company's existing ratings including theBa3 senior subordinated and Ba1 senior implied. The outlook is stable.

Moody's said the notes are rated are one notch below the senior implied rating due to effective subordination to pro-forma $532 million of secured debt.

The ratings benefit from XTO's very strong hedge position, visible production and reserve gains within acceptable expected debt levels, high level of basin geologic knowledge in core areas, a diversified base, 8.6 year reserve life on proven developed reserves, high 94% of XTO-operated properties, and sound record of building scale and diversification at competitive full-cycle costs and cash-on-cash returns, Moody's said.

Moody's added that it does not expect XTO to be upgraded soon, absent a very large quality acquisition funded heavily with equity or, less likely, more diversified organic production growth from properties delivering new wellbores with longer volumetric half-lives than its dominant core East Texas properties which account for 44% of production.

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