S&P cuts SpectraSite

Standard & Poor's lowered its senior unsecured debt rating on tower operator SpectraSite Holdings Inc. to D from C following its bankruptcy filing in conjunction with a debt restructuring plan negotiated with bondholders earlier this month.

S&P revised the watch implications on SpectraSite's $1.1 billion secured bank loan rating at the operating company level to positive from negative. The operating unit, SpectraSite Communications Inc., has filed bankruptcy and is expected to continue to service the bank debt.

Following emergence from bankruptcy, S&P said the CC rated bank loan will be re-evaluated in light of the new capital structure of the parent and could be upgraded if the new corporate credit rating for SpectraSite Holdings is higher than CC.

Fitch cuts Fiat

Fitch Ratings downgraded Fiat SpA's senior unsecured debt rating to BBB- from BBB. The outlook remains negative.

The downgrade reflects Fitch's views on Fiat Auto's expected future profit generation against the background of overall weaker than expected cash generation during 2002 and concerns about future sales volumes.

Fitch continues to view Fiat as an investment-grade company, but the outlook reflects concern about failure to meet cost reduction objectives in the automotive division over the coming 9-12 months.

Fitch also views the put option to sell the remaining 80% in Fiat Auto to General Motors Corp. as a substantial value in the medium- to long-term.

Nevertheless, Fitch believes the overall group credit profile has trended towards the lower end of the BBB rating category.

In October, Fiat committed to reducing net financial position to €4.4 billion by year-end, which does not include a €1.15 billion loan, which is non-recourse to Fiat.

Debt reduction from current levels down to the projected YE level is projected to be largely funded by fourth quarter cash flow generation and proceeds from disposals.

By achieving this debt reduction, the group will be substantially in compliance with one major condition agreed with the banking partners providing the mandatory convertible loan.

Fitch cuts Aquila to junk

Fitch Ratings downgraded the senior unsecured rating of Aquila Inc. to BB from BBB- to reflect lower than expected operating cash flows as the company exits the wholesale energy market.

The convertible preferreds were cut to BB- from BB+, but the rating will be withdrawn following the conversion of the issue next week.

Debt of the Asia Pacific and Canada units was also cut to BB from BBB- and placed on negative watch, pending a comprehensive review of the outlook for the remaining core business and the refinancing of credit facilities coming due April 2003.

All ratings of the U.K. operations remain on evolving watch, pending the anticipated sale of the units. Discussions continue with bidders and a determination regarding acceptance of any offers is anticipated in December.

Moody's cuts Simon

Moody's Investors Service lowered the senior unsecured debt rating of the Simon Property Group Inc. to Baa2 from Baa1and the convertible preferreds to Baa3 from Baa2.

The downgrades follow the announcement bythat it has made an unsolicited offer to acquire Taubman Centers for $1.5 billion in cash at $17.50 per share, plus assume some $2.4 billion of secured debt and preferred stock.

Although Moody's recognizes that Simon may ultimately not be successful in the bid, Simon is expected to continue to be an active acquirer of regional malls in order to maintain a leadership position, even if doing so results in coverage levels and secured debt levels that are inconsistent with its Baa1 rating.

The outlook is stable.

S&P puts Simon on watch

Standard & Poor's placed Simon Property Group Inc.'s ratings on negative watch, including the convertible preferreds at BBB-.

The watch follow the recent unsolicited offer for Taubman Centers Inc. (BB+/developing watch).

S&P acknowledges the potential strategic benefits of the acquisition, but also concerns regarding the initially highly leveraged nature of the transaction, increased exposure to short-term debt and the potential for a lengthy and expensive litigation and/or proxy battle.

The concerns are against the backdrop of potentially peaking retail sales and an uncertain near-term economic outlook.

S&P rates Vivendi

Standard & Poor's assigned a B+ subordinated debt rating to Vivendi Universal S.A.'s new three-year mandatory convertible bond issue, but also placed it on watch with developing implications along with the B+ long-term debt ratings that were put on watch Oct. 17.

S&P puts Hanover Compressor on watch

Standard & Poor's put Hanover Compressor Co. on CreditWatch with negative implications. Ratings affected include Hanover Compressor's $100 million term income deferrable equity securities (TIDES) at B, $170 million 4.75% senior unsecured convertible notes due 2008 at B+, Hanover Equipment Trust 2001A's $300 million 8.5% senior secured notes due 2008 at BB- and Hanover Equipment Trust 2001B's $250 million 8.75% senior secured notes due 2011 at BB-.

S&P said the watch placement follows Hanover Compressor's announcement that the SEC was changing the status of its financial restatements review from informal to formal.

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