Moody's rates proposed PCCW convertible at (P)Baa1

Moody's Investors Service assigned a prospective senior unsecured rating of (P)Baa1 to the proposed US$400 million five-year convertible bonds of PCCW Capital No.2 Ltd., jointly and severally guaranteed by PCCW-HKT Telephone Ltd. and Pacific Century CyberWorks Ltd. The rating outlook is stable. The prospective rating is premised upon the unconditional and irrevocable guarantee provided by HKT, which is rated Baa1. Moody's added that the rating is prospective and based on review of documentation as of Thursday. It is expected the rating will be confirmed upon review of final documentation.

The rating of HKT reflects its leading market position with a strong brand and high customer loyalty, ubiquitous and modern network; experienced management, and commitment by PCCW, HKT's parent, to maintain the company's adequate financial profile. Furthermore, the rating of HKT also reflects PCCW management's stated strategy to consolidate the group around the strengths of HKT, with no plans to materially expand the scope or scale of the business. The rating of HKT also considers risks associated with PCCW, given its short credit history and recent large acquisition. HKT may be required to support the PCCW Group's capital needs over and above that company's existing reserves. This could be a concern as HKT's high level of gearing limits financial flexibility at the current rating, although this has been moderated through recent refinancing initiatives. HKT could also face strong competition as it expands into certain new and less predictable revenue streams, such as broadband and local data services.

Fitch withdraws ratings for Crown Castle

Fitch said Thursday it is withdrawing the public ratings assigned to Crown Castle International Corp. due to both the lack of management contact and the availability of adequate information. Fitch had rated Crown Castle senior secured credit facilities at BB-, senior notes and senior discount notes at B and preferred stock and senior exchangeable preferred stock at CCC+.

S&P keep Starwood Hotels on watch, negative

Standard & Poor's Thursday said the ratings for Starwood Hotels & Resorts Worldwide Inc. remain on watch with negative implications given the still-significant amount of debt maturing in the next 18 months. S&P said it expects to affirm Starwood's ratings once management makes material progress on a plan to alleviate this concern, which is expected during the first half of 2002.

Fitch affirms Spring senior unsecured debt at BBB+

Fitch affirmed the BBB+ senior unsecured debt and F2 commercial paper rating of Sprint Corp., and the BBB+ senior unsecured debt, equity unit security and F2 commercial paper rating of Sprint Capital Corp. The rating outlook remains negative.

Sprint's credit protection measures remain weak for its current rating category. Fitch will require credit protection metrics to be stronger in 2002. The company's ability to achieve these results will resolve the current negative rating outlook. Debt levels at the company increased rapidly with continued heavy investment in Sprint PCS and ION initiative over the past couple of years. A low Sprint PCS tracking stock value in 2001 required that Sprint use other sources to meet large 2001 funding requirements. The larger debt level coupled with adverse economic conditions hurting demand for data services caused credit protection measures in 2001 to fall short of expectations.

The company has taken an important credit positive step with the elimination of its ION initiative that will enhance cash flows at its FON group. Nevertheless, the key driver to improving credit measures will be the success of Sprint PCS and its ability to generate its expected EBITDA target of $3.1 billion in EBITDA in 2002. Sprint PCS's ability to meet high EBITDA expectations are uncertain due to an increasing reliance on sub-prime subscribers and the long term impact those customers will have on ARPU, churn and bad debt. Reductions of capital expenditures within the FON group combined with stable PCS Group capital spending drives the lower overall funding requirement of $1.8 billion during 2002. The FON Group is expected to be free cash flow break-even benefiting from the termination of ION. PCS Group capital spending for 2002 is focused on increasing network capacity and launching 3G1x network capability.

Fitch said it will closely monitor Sprint PCS and overall Sprint results. Fitch's rating considers the risks of a turnaround in the FON Group and the potential shortfall of EBITDA growth within Sprint PCS, which could put downward pressure on Sprint's debt ratings. If Sprint is able to demonstrate consistent progress toward meeting 2002 financial objectives over the next couple of quarters, Fitch's rating could stabilize.

Moody's ups Affiliated Computer

Moody's upgraded Affiliated Computer Services Inc.'s senior debt rating to Baa1 from Baa2 reflecting an expectation that ACS will continue to achieve the profitable growth it has demonstrated over the past several years, benefiting from a positive outlook for the outsourcing industry, particularly business process outsourcing in which the company derives over 50% of revenue. The outlook is stable. Ratings raised include the $317 million convertible subordinated notes due 2006 to Baa2 from Baa3 and the $230 million convertible subordinated notes, due 2005, to Baa2 from Baa3.

Fitch assigns AA ratings to XL Capital units.

Fitch on Thursday assigned an AA insurer financial strength rating to a number of XL Capital Ltd.'s insurance subsidiaries. The subsidiaries include the organization's primary insurance subsidiary, XL Insurance Ltd., and its primary reinsurance subsidiaries XL Re Ltd. and XL Reinsurance America Inc. Fitch also upgraded the IFS rating of XL Re Latin America Ltd. to AA from A, reflecting its position as a wholly owned reinsurance subsidiary of XL, and affirmed the' AA IFS rating of recently acquired XL Winterthur International Insurance Co. The rating outlook is stable.

Fitch affirms Countrywide Capital unit at A

Fitch has affirmed the A senior debt and F1 commercial paper rating of Countrywide Home Loans Inc., a wholly owned subsidiary of Countrywide Credit Industries, Inc. The rating outlook for Countrywide remains stable. The ratings of Countrywide continue to reflect the consistent financial performance that has been proven over an extended period of time, Fitch said. The ratings also focus on the company's market leadership in the U.S. mortgage banking industry, effective risk management capabilities, and expanded business operations, which complement the core mortgage banking operation.

S&P rates PCCW convertibles BBB

Standard & Poor's assigned a BBB rating to the $400 million of convertible bonds due 2007 to be sold by Pacific Century CyberWorks Ltd.'s PCCW Capital No. 2 Ltd. unit.

S&P rates new Ford convertible BBB-

Standard & Poor's assigned a BBB- rating to the $3 billion of cumulative convertible trust preferred securities to be issued by Ford Motor Co. Capital Trust II.

S&P rates new Teradyne convertible BB-

Standard & Poor's assigned a BB- rating to the $400 million of 3.75% convertible senior notes due 2006 sold by Teradyne Inc.

S&P removes Ann Taylor from watch

Standard & Poor's removed Ann Taylor Inc. from CreditWatch with negative implications and confirmed the existing ratings. The outlook is stable.

Ratings affected include Ann Taylor Stores Corp.'s $100 million convertible debentures due 2019 rated B.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.