S&P rates new Photronics convert B

Standard & Poor's assigned a B rating to Photronics Inc.'s pending $125 million of convertible subordinated notes due 2008.

The new issue is expected to repay outstanding higher-coupon debt, thereby reducing interest expense, and extending the maturity schedule, while moderately increasing cash balances.

The ratings reflect moderate financial profile and a strong position in an evolving niche market for semiconductor photomasks, offset by challenges of international growth and acquisition strategy in a rapidly changing competitive marketplace, S&P said.

The outlook is negative. Very limited marketplace visibility and rising pricing pressures have led to declining revenues, weaker cash flows and debt protection measures that are marginal for the rating.

Fitch rates Disney convert BBB+

Fitch Ratings assigned a BBB+ rating to the $1.15 billion of 2.125% senior convertible debentures of the Walt Disney Co.

The outlook is negative, reflecting weak credit metrics for the rating category, balanced by management's objective of strengthening the credit profile.

Efforts have focused on reducing the overall cost base in the current difficult environment and conserving cash flow. Capital expenditures have declined and no significant acquisitions or share repurchases are planned.

Earnings, however, remain under pressure and Disney has a limited number of non-core assets that can be sold to improve the balance sheet, Fitch said.

Prospects for a sustained earnings recovery at the parks and resorts business, which has been hampered by reductions in vacation travel, the weak domestic economy and more recently by the conflict in Iraq remain uncertain at this time, Fitch said.

S&P rates Sealed Air notes BBB

Standard & Poor's assigned a BBB rating to Sealed Air Corp.'s $200 million senior notes due 2008 and put the rating on negative watch with the other ratings, including preferreds at BB, which were affirmed.

The watch reflects potential adverse affects of asbestos settlements on the financial profile. A portion of the proceeds from the new notes will go toward the settlements, which include a required payment of $512.5 million in cash and 9 million shares of common stock.

The ratings reflect an above-average business risk profile, strong free cash flow generation and a somewhat aggressive financial management, S&P said.

S&P cuts Mirant to B

Standard & Poor's lowered the ratings of Mirant Corp., including the convertibles to B from BB, and subsidiaries, and placed the ratings on negative watch.

The rating actions reflect that creditworthiness has deteriorated materially due to depressed power prices, high leverage and insufficient cash resources to meet debt obligations over the next two years, S&P said.

The watch also reflects uncertainty about the outcome of efforts to restructure debt in advance of the mid-July 2003 maturity of a $1.125 billion term loan. The ongoing delay in the release of audited financial statements is also a factor.

S&P cuts GM outlook

Standard & Poor's revised the outlook for General Motors Corp. and General Motors Acceptance Corp.'s to negative from stable. The ratings (BBB/negative/A-2) were affirmed.

The change reflects an average overall business position and a financial profile dominated by burdensome benefits obligations.

While market share has stabilized, some of GM's recent success is attributable to aggressive discounting. Hence, its profit margin in North America has remained only fair and the disproportionate reliance of financial performance on light trucks poses risks, S&P said.

S&P expects competition in light trucks to intensify significantly during the next few years as a result of the anticipated launch of many additional products and the establishment of related production capacity by other automakers.

S&P affirms Ford ratings

Standard & Poor's affirmed the ratings on Ford Motor Co. (BBB/negative/A-2) and is keeping the outlook at negative.

Current ratings reflect the assumption that, as a result of its restructuring measures, Ford will be able to continue broadly improving financial results in its global automotive operations, even if U.S. industry conditions deteriorate further, S&P said.

The ratings are most immediately vulnerable to a downgrade if restructuring measures are unsuccessful, given poor financial performance over the past two years. S&P views management's target of breakeven pretax automotive earnings in 2003 as an important benchmark.

S&P ups Affiliated Computer outlook

Standard & Poor's affirmed the ratings of Affiliated Computer Services Inc. (senior at BBB and subordinated at BBB-) and revised the outlook to positive from stable, reflecting solid profitability and stable cash flow generation despite a difficult IT spending environment.

Although acquisitions are expected to remain an integral part of it growth strategy, S&P expects the company to continue to maintain a moderate financial profile. The positive outlook reflects the prospects for continued earnings improvement that could lead to an upgrade.

S&P ups Brightpoint outlook

Standard & Poor's revised the outlook of Brightpoint Inc. to stable from negative and affirmed the ratings (subordinated at CCC+), reflecting improved profitability, capital structure and financial profile.

The company has repurchased substantially all of the zero-coupon convertible notes due 2018 and as a result materially improved its capital structure and effectively eliminated the financial risk of the convertible noteholders exercising the March put option.

S&P affirms News Corp. ratings

Standard & Poor's affirmed the ratings of News Corp. Ltd. (BBB-/stable) in light of its proposed acquisition of a 34% stake in Hughes Electronics Corp. The outlook is stable.

S&P views the transaction positively inasmuch as News previously lacked a U.S. satellite direct-to-home platform. News also brings expertise as a result of its track record with British Sky Broadcasting Group plc.

Affirmation of the rating and the outlook assume a continuation of recent financial discipline, achievement of EBITDA in line with guidance and successful execution of recent acquisitions.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.