Fitch affirms Kramont Realty's convertibles BB-, changes outlook

Fitch Ratings affirmed Kramont Realty Trust's 9.75% series B-1 convertible preferred stock and the 9.5% series D perpetual preferred stock at BB-. The rating outlook has been revised to stable from negative.

The change in outlook reflects the recent closing of a $190 million mortgage financing, a $125 million senior secured credit facility refinancing, $61 million (net proceeds) in common stock issuance and the formation of the company's first joint venture, all of which have broadened KRT's sources of capital.

Earnings stability of the portfolio has also improved with the signing of good-quality tenants, such as Wal-Mart, Kohl's and Redner's Supermarket, offsetting occupancy lost through store closings and lease rejections by Kmart, Ames and Cub Foods, Fitch said.

However, despite the considerable improvement in financial flexibility funding requirements on committed projects will continue to stress KRT's access to capital, Fitch added.

Moody's confirmed American Financial

Moody's confirmed the ratings of American Financial Group, including senior debt at Baa3.

The outlook remains negative.

The confirmation follows the successful restoration of unassigned funds at Great American primarily due to regulatory approval of an extraordinary dividend of a subsidiary that holds AFG common stock.

Moody's noted that this action essentially restores unencumbered dividend capacity to the holding company and reduces our concerns regarding AFG's financial flexibility.

In addition, Moody's notes that the holding company's cash position has improved following its recent convertible note offering, which primarily paid down bank borrowings.

The outlook continues to reflect concerns regarding modest cash coverage, the impact of the low interest rate environment on fixed annuities and, most significantly, exposure to bank borrowings maturing in 2004.

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