Fitch cuts GATX to junk

Fitch Ratings lowers GATX Financial Corp.'s senior debt to BB from BBB- and commercial paper ratings to B from F3.

Also, the outlook was revised to stable from negative.

The rating changes center on GATX's weakening credit profile and the challenging operating environments in the company's core markets.

Specifically, nearly all of the company's leverage and capitalization measures weakened in 2002.

Continued weak internal capital formation limits management's ability to be opportunistic in the current challenging environment and position the company for growth when the economy rebounds, the rating agency said.

Therefore, Fitch believes that a revision to the dividend policy is likely both to help build the capital base but also to provide a buffer to unsecured debtholders as additional secured debt is issued.

S&P puts SPX on positive watch

Standard & Poor's placed the ratings of SPX Corp. on positive watch, reflecting strong operating performance and cash generation, steps to improve debt structure and an apparent shift to a more conservative financial posture.

Operating performance in 2002 has been strong notwithstanding a weak industrial economy.

SPX has also improved its debt composition with a $500 million 10-year senior unsecured debt issue, S&P said. Proceeds were used to reduce bank debt and SPX amended its secured bank credit facility, extending maturity dates.

SPX now has a very manageable annual debt maturity schedule for the next five years, the rating agency added.

Year-end 2002 net debt to EBITDA is estimated to be around 2.6x.

If it is determined that management has tempered its financial posture somewhat to remain compatible with less-aggressive growth objectives, the corporate credit rating could be raised to investment grade, S&P said.

S&P would be expecting sustained improvement in credit measures, with debt to EBITDA averaging in the 2x to 2.5x area, and funds from operations to debt averaging around 30%.

Fitch rates MetLife notes A

Fitch Ratings has assigned a rating of A to MetLife Inc.'s $1.0 billion senior unsecured debentures due May 15, 2005.

The outlook is stable.

The debentures are being offered in a remarketing as required by the convertible equity security units issued by MetLife in its IPO in 2000. Proceeds of the remarketing will be used to purchase collateral to support the unitholders' obligations to acquire MetLife common stock on May 15, 2003.

Fitch's rating on the equity units will be withdrawn upon settlement of the purchase contract since after the settlement the underlying purchase contract will no longer exist.

The rating reflects inherent strength and diversity of MetLife's primary operating segments, solid balance sheet fundamentals and strong cash flow-generating power.

MetLife continues to possess strong financial flexibility but is approaching its targeted maximum long-term debt to total capitalization of 25% with this issuance.

On a pro forma basis after satisfaction of the forward purchase contract on May 15, 2003, equity-adjusted leverage is about 23.9% and remains within Fitch's threshold of 30% for the ratings assigned.

The fixed charge coverage has improved in 2002 to the 8x range and is expected to drop moderately to a still solid range with this issuance and the $1.0 billion issuance in December 2002, Fitch said.

S&P rates Freeport at B-

Standard & Poor's assigned a B- rating to Freeport-McMoRan Copper & Gold Inc.'s $500 million of senior convertible notes due 2011 and affirmed its other ratings.

Ratings are limited by the risks of operating in Indonesia and aggressive debt leverage.

Still, Freeport benefits from low production costs and improved liquidity due to recent refinancing activities, S&P said.

Freeport's management has been comfortable operating with high debt leverage, which at yearend 2002 was a very aggressive 90%. However, the company has not repurchased any stock since early 2001 and is prohibited under its bank credit facilities from doing so.

This may change when the company replaces its bank credit facility, which the company plans to do shortly, S&P added.

Freeport paid down $300 million of debt in 2002 and remains committed to reducing its burdensome debt levels.

Freeport is expected to generate meaningful free cash flow, which came to $325 million for 2002, and had $8 million in cash and $455 million available on a $734 million bank credit facility at Dec.

Since Dec. 31, the company has issued $1 billion of new debt, a portion of which will be used to repay its bank facilities. After paying down the bank facilities, Freeport is expected to have about $701 million of cash, S&P said.

The outlook is stable, reflecting the expectation that Freeport will continue to face considerable country risk but will meet the debt maturities it faces in the near future.

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