S&P rates Allied Waste mandatory at B

Standard & Poor's assigned a B rating to Allied Waste Industries Inc.'s proposed mandatory convertible, a BB- rating to parent Allied Waste North America Inc.'s proposed $300 million senior notes due 2013 and a BB rating to the parent's new $3 billion senior secured credit facilities.

S&P affirmed existing ratings, including the BB corporate credit rating. About $8.9 billion of debt is outstanding.

The outlook is stable.

Ratings reflect a strong competitive business position, offset by a relatively weak, albeit improving, financial profile.

Gradual strengthening in the credit profile is expected over time, aided by additional debt reduction from internally generated funds and selected divestitures, S&P said.

Intermediately, debt to EBITDA should be in the 4x-4.5x range, EBITDA and EBIT interest coverages around 2.5x and 1.75x, respectively and debt to capital in the 70%-75% range.

Fitch rates Allied Waste mandatory at B-

Fitch Ratings assigned a B- rating to Allied Waste Industries Inc.' proposed mandatory convertible offering, a BB rating to the $3 billion senior secured credit facility and BB- rating to the proposed $300 million senior secured notes.

The outlook is stable, having recently been revised from negative to reflect steady and healthy debt reduction amid a weak operating environment that has impacted margins and operating cash generation, Fitch said.

S&P cuts Fleming on bankruptcy

Standard & Poor's downgrade the ratings of Fleming Cos. Inc. to D on the company's bankruptcy filing.

The bankruptcy reflects liquidity constraints following an unsuccessful effort to obtain a new or renegotiated bank facility, which was necessary given potential covenant violations under the old agreement.

Fleming had also previously announced the likelihood that its 2002 financial results would need to be restated.

Other challenges include an SEC inquiry into accounting matters, shareholder lawsuits, the recent departure of the CEO and factors such as downsizing to adjust for the loss of the Kmart Corp. contract, completing the sale of retail assets and integrating the Core-Mark International Inc. acquisition.

Fitch cuts Fleming on bankruptcy

Fitch Ratings downgraded the ratings of Fleming Cos. Inc. to D on the company's bankruptcy filing.

The bank facility rating reflects the expectations for recovery on the $975 million facility, which is secured by inventories and accounts receivables that totaled about $1.6 billion at yearend 2002.

Senior unsecured and subordinated ratings reflect limited recovery. About $1.4 billion in senior unsecured and subordinated debt was outstanding at yearend.

Moody's cuts Fleming on bankruptcy

Moody's Investors Service lowered all long-term debt ratings of Fleming Cos. Inc. on the company's bankruptcy filing.

The ratings consider estimated recovery levels for the several classes of debt. However, the outlook is negative, due to uncertainties of recovery for creditors as the company attempts to reorganize.

The $150 million of 5% convertible senior subordinated notes due 2009 were lowered to C from Ca.

S&P confirms Amkor ratings

Standard & Poor's affirmed Amkor Technology Inc.'s ratings, including senior unsecured debt at B+ and subordinated debt at CCC+, and assigned a B+ rating to its proposed $200 million credit facility.

Ratings reflect volatile conditions in the semiconductor market and a sustained deterioration in profitability and debt-protection measures, offset by adequate near-term liquidity.

Expected modest sequential improvements in operating performance and adequate cash balances provide ratings support.

Fitch ups Lockheed Martin

Fitch Ratings raised the ratings on Lockheed Martin's senior unsecured debt and bank facility to BBB+ from BBB but revised the outlook to stable from positive.

The upgrade reflects significant near-term debt reduction and the positive outlook in the majority of defense and government businesses, which generated 94% of revenues in 2002. Low exposure to commercial markets currently distinguishes the company from many of its peers.

Concerns center on the continuing uncertainty about the F/A-22 program, potential reductions in tactical aircraft purchases by the U.S. Department of Defense, the weak commercial space market and spending levels and strategic direction at NASA.

Allocation of significant cash balances and future cash flow is an additional concern. After retiring nearly $1.4 billion of debt in 2003, Lockheed will have minimal debt maturities in the next two years and no callable debt outstanding but little opportunity to tender economically for debt unless interest rates rise.

S&P cuts DDi convert to D

Standard & Poor's lowered the rating on DDi Corp.'s 6.25% convertible subordinated note to D from C and senior secured bank loan to CC from CCC-.

Ratings on the senior secured bank loan remain on negative watch.

The downgrades were made because DDi's forbearance agreement with senior lenders expired on Tuesday and the company announced it would not make the interest payment on the 6.25% convertible subordinated note due April 1, 2007.

Weak financial performance in fourth quarter resulted in failure to meet the bank debt covenant for minimum EBITDA and restricted its ability to make the interest payments on the 5.25% and 6.25% convertible subordinated notes.

DDi continues to negotiate with senior lenders and subordinated convertible noteholders, in an effort to restructure its debt, S&P noted.

Independent accountants, engaged by management, have expressed a substantial doubt about the company's ability to continue as a going concern.

The $68.5 million credit facility and $200 million convertible subordinated notes have been reclassified as current liabilities. In addition, the company recorded a goodwill impairment charge of $127 million for fourth quarter.

Fitch rates new KeySpan notes A-

Fitch Ratings assigned an A- rating to KeySpan Corp.'s new $150 million of 4.650% notes due 2013 and $150 million of 5.875% notes due 2033.

The outlook is stable.

The rating and outlook recognize the current and prospective near-term credit profile, strength and predictability of core natural gas distribution and electric generation operations and progress in reducing debt.

Fitch puts Reliant on positive watch

Fitch Ratings put Reliant Resources, Inc. on Rating Watch Positive including its senior unsecured debt at CCC+. The company was previously on Rating Watch Evolving.

Fitch said the rating action Reliant's announcement that it has successfully completed a $6.2 billion secured financing package which replaces $5.9 billion of existing unsecured credit facilities, including the $2.9 billion Orion Power bridge loan which expired on March 31, 2003. The new credit facilities also provide RRI with $300 million of incremental liquidity to support cash margining requirements.

In addition to eliminating the significant uncertainty surrounding Reliant's near-term liquidity position, the revised credit agreement should provide Reliant with the flexibility to access the debt capital markets over time, Fitch said. Importantly, terms and conditions do not place any immediate pressure on Reliant to sell assets and/or tap alternative sources of capital as Reliant will not be required to make any mandatory principal payments prior to May 15, 2006.

Fitch expects to resolve the rating watch and refine Reliant's rating in the near term, including the assignment of a new senior secured credit rating.

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