Fitch rates new Interpublic convert BBB-

Fitch Ratings assigned a BBB- rating to The Interpublic Group of Cos. Inc.'s proposed $600 million of convertible senior notes due 2023.

Also Fitch affirmed Interpublic's senior unsecured debt at BBB-, bank credit facility at BBB- and other outstanding convertible subordinated notes BB+.

The outlook is negative.

The ratings reflect management's efforts to assure adequate liquidity in 2003 and to manage its leverage down over the intermediate term, while recognizing that revenues have been and are expected to remain under pressure and that the combination of lower revenues and higher costs have cumulatively constricted EBITDA margins.

Moody's cuts Shaw converts to Ba3

Moody's Investors Service lowered the ratings of The Shaw Group, including the 0% convertibles to Ba3 from Ba2.

In a related action, Moody's assigned a (P)Ba1 rating to Shaw's proposed senior secured and guaranteed $250 million bank credit facility and a (P)Ba2 rating to the proposed $250 million guaranteed private placement senior note issue.

The outlook is stable.

Net proceeds from the proposed $250 million note issuance, along with existing cash balances, will be used to make a tender offer for up to $384.6 million of the outstanding convertibles, subject to the $250 million note offering.

The downgrade reflects expected continued pressure on earnings and cash flow in fiscal 2003 and 2004, and the company's downward revision of its earnings guidance to about $60 million in 2003.

The outlook reflects the expectation that Shaw will continue to be successful in booking business in segments other than EPC power work, predominately in the environmental and infrastructure area, and that it will have steady, albeit lower, earnings and cash flow from its non power segment business.

It is also anticipated that Shaw will focus on managing cash resources to meet the remaining $270 million outstanding on the convertible, assuming the tender for up to $384.6 million, at the May 1, 2004, put date.

S&P confirms Valero ratings

Standard & Poor's confirmed the ratings of Valero Energy Corp., including senior unsecured debt at BBB and preferreds at BBB-, following its announcement to sell limited partnership common units and $350 million of logistics assets to Valero LP.

The outlook remains negative.

The credit outlook has improved in recent weeks because of a strong rebound in refining margins and the announced transactions, which will reduce the company's debt leverage by about $500 million, S&P said.

Liquidity should be adequate to fund operations and repay maturing debt for the next two years. Pro forma for the transactions with Valero LP, S&P believes Valero Energy will have about $1.2 billion of available bank credit in addition to cash balances.

However, S&P said liquidity could tighten at year-end and prompt a ratings downgrade if Valero Energy is unsuccessful extending its 364-day bank credit facility without a suitable replacement.

Other than the maturing 364-day bank credit facility, Valero Energy does not face meaningful debt maturities in 2003 or 2004. About $785 million of debt matures in 2005.

The negative outlook is unlikely to be revised to stable until the company makes further progress deleveraging.

Fitch confirms Anthem

Fitch Ratings confirmed the ratings of Anthem Inc., including senior debt at A- and subordinated debt at BBB+. The outlook is stable.

The ratings continue to be supported by strong balance sheet fundamentals, expanding geographic diversification, a solid management team and strong competitive position in its markets.

Strengths are offset to some extent by considerable issues facing the health insurance industry, including the rapidly increasing cost of providing healthcare services, as well as regulatory and legal challenges that could impact costs and prices.

S&P rates HannStar convertibles B

Standard & Poor's assigned a B rating to HannStar Display Inc.'s $150 million convertible bonds due 2008. The outlook is stable.

S&P noted the convertibles are rated lower than the B+ corporate credit rating because of the amount of secured debt held by HannStar Display.

The rating on the company reflects highly volatile and extremely competitive industry conditions, and the company's narrow product mix, S&P said. These weaknesses are partially mitigated by the company's moderately conservative capital structure and adequate liquidity.

HannStar Display posted a net profit of NT$886 million in 2002, a significant improvement on a net loss of NT$6.4 billion in 2001that was due to rising panel prices in the first half of 2002. As a result of two share offerings in 2002, HannStar Display has a more conservative capital structure than other Taiwan panel manufacturers.

High depreciation expenses enabled the company's EBITDA interest coverage to rise above 10x in 2002, while its ratio of funds from operation to total debt was maintained at more than 30% over the same period, S&P added.

S&P said it expects HannStar Display's leverage ratio to rise in 2003 as the company needs to make huge capital expenditures, which will be supported by a syndicated loan and the present bond issue.

Moody's cuts Woodstock exchangeables

Moody's Investors Service downgraded Woodstock Finance Ltd.'s €260 million 1% exchangeable bonds due 2004 to Baa1 from A3.

Moody's said the action was prompted by the recent downgrade of Dixons Group plc to Baa1 from A3. The exchangeable bonds are backed by an underlying bond issued by DSG Retail Ltd., which is fully supported by an irrevocable guarantee issued by Dixons.

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