S&P rates Trico notes B

Standard & Poor's assigned a B rating to Trico Marine Services Inc.'s planned offering of $250 million senior unsecured notes. The transaction refinances Trico's outstanding $248 million senior unsecured notes issue and extends its maturity schedule.

S&P said Trico Marine's ratings reflect its participation in the volatile offshore support segment of the petroleum industry and aggressive financial leverage.

Roughly half of the company's revenues are derived from the Gulf of Mexico, a market that typically operates on short-term contracts, S&P noted. The recent weakness of the Gulf of Mexico market has been tempered by the company's exposure to the relatively stable international markets.

Cash flow stability is underpinned by the contract position of the company's international fleet; a high percentage of the company's 2002 projected revenue is under contract, S&P said.

In the near term, Trico's financial profile will reflect both the difficulties in the Gulf market and the effects of its newbuild program, S&P said. Total debt to capital is expected to remain in the 50% to 55% range, however debt to EBITDA likely will exceed 6.0 times. Leverage is expected to decrease with the recovery of the Gulf of Mexico market and the contribution of the newly constructed vessels in the following year.

Fixed charge coverage measures are weak for the rating, with EBITDA to interest plus capital expenditures below 1.0 time likely in 2002, S&P added.

Moody's rates H&E Equipment's loan B2; notes B3

Moody's Investors Service assigned a B2 rating to H&E Equipment Services LLC's proposed $125 million senior secured revolver due 2007 and a B3 rating to the proposed $275 million senior secured notes due 2012. In addition, the company was assigned a senior implied rating of B3 and a senior unsecured issuer rating of Caa2. The ratings have a stable outlook.

The revolver will be secured by a first-priority lien on assets and company stocks. The notes will be secured by a second-priority lien on the same assets. Both the loan and the notes will be used to fund the formation of the company through the combination of Head and Engquist Equipment, LLC and ICM Equipment Company LLC.

"The ratings reflect the Company's high debt leverage, thin interest and fixed charges coverage, low profit margins, negative-to-marginal free cash flow generation, low equipment utilization rate, heavy reliance on a limited number of equipment suppliers, exposure to business and capital spending cycles in the construction and manufacturing industries, intense competition in the equipment rental industry, and significant integration challenges," Moody's said. "On the other hand, the ratings also reflect the company's strong equipment service and support capacity, profitable parts and service operations, younger-than-average fleet, good asset coverage, and established channels of disposing of used equipment."

The stable outlook reflects improvement in funding and maturity profile following the refinancing.

After the transaction, pro forma debt will be about $337 million and total debt leverage will be about 7.4 times pro forma combined 2001 EBITAR.

S&P rates H&E Equipment loan B+; notes B

Standard & Poor's assigned a B+ rating to H&E Equipment Services LLC's proposed $125 million five-year senior secured revolver and a B rating to the proposed offering of $275 million senior secured notes due 2012. In addition, a corporate credit rating of BB- was assigned to the company.

The bank loan is secured by a fully perfected first priority security interest in all assets.

Ratings reflect the company's market position, geographic location in high growth markets and customer diversity. These positive factors are offset by the company's debt leverage and aggressive financial policy, S&P said.

H&E Equipment is being formed by the combination of two equipment rental companies, Head & Engquist Equipment LLC and ICM Equipment Company LLC. The proposed financing for H&E Equipment will be used in connection with the combination.

H&E's total debt to EBITDA is 3.6 times and EBIDTA to cash interest coverage is 2.7 times on a pro forma basis.

Moody's rates Asbury Auto B3

Moody's Investors Service assigned a B3 rating to Asbury Automotive Group, Inc.'s planned $200 million senior subordinated notes due 2012. The outlook is stable.

Moody's said the ratings reflect Asbury's high leverage, caused in part by acquisition-related financing; mixed performance measures despite relatively high prices paid to acquire high-end and import brands, which are expected to bring higher than average margins and service revenue contribution; the likelihood of debt-financed acquisitions in the future; short history of operations as a consolidated company; short tenor of the senior management team, which nonetheless consists largely of experienced industry participants; historically high inventory levels relative to rated megadealers; concentration in a relatively small number of primarily southern markets; and the thin margins typical of automotive dealerships.

Positives include the potential for increasing profitability as Asbury integrates best practices among its dealerships; a focused portfolio of brands which is weighted toward the fastest growing automotive segments; the use of equity for previous acquisitions and the equity cushion provided by a $70 million IPO in March 2002; diversity of brands, which reduces exposure to poorly selling producers or models; and the demonstrated ability to limit profit erosion during periods of low automotive sales as a result of less cyclical service revenues, Moody's added.

The rating agency noted that Asbury's leverage measures have not changed significantly over the past four years because of debt-financed acquisition activities, although interest coverage ratios have improved due to increases in operating margins and lower interest costs.

Moody's said it anticipates that Asbury will continue to acquire properties it and does not expect operating performance measures to improve significantly in the near term.

Moody's lowers Anker Coal

Moody's Investors Service downgraded Anker Coal Group, Inc. including cutting its $92.5 million 14.25% second priority senior secured notes due 2007 to C from Caa2.

Moody's said the downgrade is in response to an extended period of adverse operating and financial results that culminated in Anker Coal missing a scheduled interest payment of $6.6 million on April 1.

Moody's also said that Anker has excessive leverage (at September 30, 2001, debt exceeded total assets and was more than 15x LTM EBITDA) and faces perennial operational problems at certain of its mines involving irregular and thin coal seams, difficult ground control conditions and short-lived reserves, as well as mine permitting challenges and management turnover.

These fundamental factors have led to consistent operating losses over the last four years and, in turn, under-investment in Anker's fixed assets, Moody's said.

S&P lowers U.S. Timberlands Klamath Falls

Standard & Poor's downgraded U.S. Timberlands Klamath Falls LLC and its affiliate U.S. Timberlands Finance Corp. including cuttings its senior unsecured debt to CCC- from B. S&P kept the companies on CreditWatch but changed the implications to developing from negative.

S&P said the downgrades follows the companies' failure to make the May 15 interest payment on $225 million in senior notes due 2007.

U.S. Timberlands' management expects to make the interest payment within the 30-day grace period using proceeds from a planned timberland sale, S&P noted. Should it fail to do so, ratings will be lowered to D; if the interest payment is made within the grace period the ratings could be raised.

S&P cuts Adelphia

Standard & Poor's lowered Adelphia Communications Corp.'s corporate credit rating to D from CCC-. S&P said the downgrade follows Adelphia's missed interest payment on its $500 million 9.375% senior unsecured note issue. The rating on that issue was also lowered to D from CC. Other Adelphia bond issues were lowered to C from CC and remain on CreditWatch with negative implications; its bank loans were left unchanged at CCC and remain on CreditWatch with negative implications.

S&P said it expects Adelphia will miss payments on other unsecured, subordinated and preferred stock issues.

It added that it kept the secured bank loan ratings unchanged because it believes that given the value of the cable television properties in the respective bank credit agreements these creditors have reasonable prospects to ultimately receive full repayment in a liquidation scenario.

S&P upgrades Denbury Resources

Standard & Poor's upgraded Denbury Resources Inc. Ratings affected include Denbury's $200 million 9% senior subordinated notes due 2008, raised to B from B-, its $300 million revolving credit facility due 2002, raised to BB from BB-. The outlook is stable.

S&P said it upgraded Denbury's because the company continues to have leverage that is consistent with the BB rating category, a more disciplined financial philosophy since the severe 1998-99 industry downturn, the expected improvement in the company's financial profile resulting from likely elevated oil prices in 2002, expectations for prudent reinvestment of upcycle cash flows and good production growth during the next two years from Denbury's long lead-time development projects in

Mississippi, which will further enhance the company's debt-service capacity.

The ratings reflect Denbury the company's midsize reserve base, a worse-than-average cost structure and an aggressive growth strategy, S&P added.

Positives include its high percentage of company-operated properties that require modest future development expenses and have a fairly long reserve life, which provides the company with meaningful operational and financial flexibility.

Moody's puts Globopar on review

Moody's Investors Service put Globo Comunicacoes e Participacoes SA on review for possible downgrade, including its $1.3 billion euro medium-term notes rated B1.

Moody's said it began the review because of concerns about the impact of the increasingly weak advertising sector (14% contraction in 2001) on Globopar's most important subsidiary, TV Globo; the devaluation of the Real on the company's ability to service its sizable foreign debt burden; and the investment requirements of Globopar's other subsidiaries, as the holding company relies almost exclusively on TV Globo for support.

Moody's said it is also concerned about Globopar's diminishing liquidity as its cash balances are increasingly depleted.

Globopar's credit profile appears unacceptably weak relative to its current ratings, Moody's noted.

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