Moody's confirms Sibneft

Moody's Investors Service confirmed OAO Siberian Oil Co. (Sibneft) including its senior unsecured debt at Ba3. The outlook is positive. The confirmation completes a review for possible downgrade begun in December 2002 when Sibneft made a successful joint bid for Slavneft.

Moody's said that the confirmation of Sibneft's ratings follows several developments which increase the certainty that the merger with Yukos will go ahead and that are of benefit to Sibneft's bondholders. Moody's noted Yukos's commitment to the transaction is strong reflected in the recent signing of the definitive merger agreement with a punitive $1 billion compensation clause if either party should withdraw without good cause. Also, Moody's would expect that the payment of the initial installment to Sibneft's shareholders has very likely been made.

In addition Sibneft has received $825 million from TNK for its stake in Orenburgneft which has reduced its debt from $2.2 billion at the end of 2002. Despite the announcement of a high dividend payment, Sibneft will, in Moody's view, likely end 2003 with lower debt than 2002.

S&P cuts HeidelbergCement senior unsecured debt

Standard & Poor's downgraded HeidelbergCement AG's senior unsecured debt including cutting its €30 million notes due 2005 and €50 million floating-rate notes due 2008 and HeidelbergCement Finance BV's €1 billion 6.375% bonds due 2007, €25 million floating-rate notes due 2004, €25.565 million floating-rate notes due 2004, €300 million 4.75% bonds due 2009 and €45 million floating-rate notes due 2006 to BB- from BB+. S&P assigned a BB+ rating to its planned €600 million bonds due 2010 and new €1.4 billion bank loan due 2006. The outlook is negative.

S&P said the downgraded to the senior unsecured debt is because of increased contractual subordination.

The new debt instruments, as opposed to existing rated debt, will benefit from upstream guarantees from the most important subsidiaries within the group, S&P said. Consequently, the existing senior unsecured debt rating has been lowered two notches below the corporate credit rating.

S&P upgrades Gruma

Standard & Poor's upgraded Gruma, SA de CV including raising its $250 million 7.625% notes due 2007 to BB+ from BB. The outlook is stable.

S&P said the upgrade reflects Gruma's improved credit protection measures because of lower debt and increased cash flow.

The rating also indicates the company's financial leverage and the challenges involved in the Mexican corn flour industry.

During 2002, the company benefited from higher sales in its U.S. operation, good growth opportunities in this market as a result of the continued increasing demand for Mexican food, along with better cost controls and improved productivity, S&P said. These factors resulted in an improvement of the company's profitability.

In addition, these positives offset the lower level of sales in Gruma's Mexican operation, which is still affected by the lower conversion to corn flour, as the low price of corn results in higher competition from the traditional method, and limits the company's ability to increase volume and sales in this market, a situation that is expected to be gradually reversed when corn prices increase.

Moody's rates Tommy Hilfiger liquidity SGL-1

Moody's Investors Service assigned an SGL-1 speculative-grade liquidity rating to Tommy Hilfiger USA.

Moody's said the rating indicates that the company has very good liquid resources to cover its obligations over the next 12 months.

The rating reflects Moody's expectation that operating cash flow, combined with existing cash balances and approximately $254 million of expected availability under committed multi-year unsecured revolving credit facilities should be more than sufficient to cover capital needs for the coming year.

Moody's rates Huntsman Advanced Materials notes B2

Moody's Investors Service assigned a B2 rating to Huntsman Advanced Materials LLC's guaranteed senior secured notes. The outlook is stable.

The ratings reflect Huntsman Advanced Materials' high leverage, thin operating margins, pricing pressure in the commodity-like basic liquid resins (BLR) which account for 22% of revenues, global BLR over-capacity, competitive pressures, uncertainty over the timing of a recovery in the company's end-markets and risks associated with the company's lack of vertical integration, Moody's said.

The ratings also recognize the potential for significant intermediate-term restructuring expenses, raw material price pressure stemming from higher epichlorohydrin prices, and the continued consolidation of the company's customer base.

The ratings, however, also take into account the company's diverse customer base, its strong competitive position in complex epoxy formulations, many of which address specific customer needs, various leading market positions, recognized brand names and recent improvements in volume, Moody's said. The ratings are also supported by potential cost savings associated with the company's restructuring plan, the potential cost savings associated with integration into Huntsman's operations, and recent improvements in business volume.

The stable outlook reflects Moody's expectation that Huntsman Advanced Materials' volume of business will continue to improve, that credit metrics will remain stable or gradually improve and that feedstock costs could somewhat pressure margins.

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