Moody's downgrades Nuevo Energy's sr sub notes

Moody's Investors Service downgraded Nuevo Energy's $150 million of 9.375% senior subordinated notes due 2010, $257 million of 9.50% % senior subordinated notes due 2008, and $2.4 million of 9.50% % senior subordinated notes due 2006 to B2 from B1 but confirmed the B2 rating for Nuevo Financing I's $115 million of trust preferred stock (TECONS). The outlook is stable.

Moody's said: "Liquidity appears sound with negligible borrowings under Nuevo's $225 million secured bank borrowing base."

The rating agency said Nuevo coped "as well as it could" with constrained cash flow during the up-cycle thanks to an under-market hedging program. Still, Moody's added: "The downgrades reflect that Nuevo's restrained cash flow was insufficient to reverse material negative business trends or avoid rising leverage, in spite of then-presiding sector strength."

Nuevo's current hedges provide downside protection on more than one-third of its oil production but would be insufficient to avoid "material shortfalls" in coverage of leveraged full-cycle costs during weakened prices.

Moody's rates Majestic Investor Holdings planned notes B2

Moody's Investors Service assigned a B2 rating to Majestic Investor Holdings, LLC's planned offering of senior secured notes due 2008. The outlook is stable.

Moody's said the rating reflects Majestic Investor's "high leverage, particularly given the current operating environment in Tunica, Mississippi and Las Vegas, Nev. Both markets have felt the impact of a weakening economy, negative visitation trends, and heightened competition both before and after the Sept.11, 2001 tragedy. Additionally, the company's Black Hawk, Colorado property will face additional competition from Hyatt's expected opening in late 2001."

Also included in the rating is the uncertainty about the length and degree of the recession and the impact it will have on gaming revenues.

The rating agency said the note offering will improve the overall financial profile of the three Fitzgeralds properties by using less debt and lower financing costs to support the assets.

Moody's upgrades Bally Total Fitness

Moody's Investors Service upgraded Bally Total Fitness Holding Corp., including lifting its $173.3 million bank facility to Ba3 from B1 and its $300.0 million 9 7/8% senior subordinated notes due 2007 to B2 from B3. The outlook is stable.

Moody's took the action because of "improvements in operations and store count growth that has largely been internally financed, and Moody's expectation that similar improvements will occur going forward."

An emphasis on growing products and services revenue has helped fitness center operations while issuing new shares for acquisitions and for the exercise of stock warrants has strengthened the balance sheet, Moody's said.

Moody's cuts Energis senior unsecured ratings

Moody's Investors Service downgraded Energis plc's senior unsecured ratings and confirmed the company's other ratings, affecting $2 billion of debt. Ratings affected include Energis Holdings Ltd.'s senior secured revolving credit facility, confirmed at Ba2 and Energis plc's £125 million senior unsecured notes due 2009, $200 million senior unsecured notes due 2009 and its £300 million global bonds due 2010, all cut to B2 from B1.

Moody's took the action after the credit facility was increased to £850 million from £600 million and extended to June 2008.

Moody's said the ratings take into consideration lower performance expectations for the remainder of the fiscal year ending March 31, 2002, including Moody's belief that the company will likely encounter continued pressure on operating margins over the near-term. In particular, Moody's said it believes that "potential delays in procurement decisions by key target clients, or more a protracted execution of larger corporate solutions, may also hamper short-term growth rates and margins."

The rating agency said the increased differential between the bank facility and the notes reflects the further subordination of the notes, which weakens recovery prospects for bondholders "in a downside scenario."

Fitch downgrades Focal Communications

Fitch Focal Communications' senior secured rating to CCC+ from B and senior unsecured rating to CCC- from CCC+ and removed them from Rating Watch Negative. The outlook is negative.

Fitch said the downgrades reflect "the worse-than-expected improvement in revenues in 2002, limited financial flexibility as the company must continue to successfully target enterprise customers, manage its data business churn and working capital position in order to remain fully funded."

The negative outlook reflects the impact the soft economy will continue to have on the company's revenues and strained capital structure.

Fitch said it "continues to be concerned with the company's ability to grow its telecom-related revenue to the level necessary to remain fully funded as Fitch expect further weakening in its data segment in 2002. Management is dedicating more resources to target enterprise customers in 2002. Although this is a significant opportunity for the company, as it needs to only capture minimal market share to breakeven in a market, it must rapidly reach the necessary level of sales productivity to remain funded."

S&P downgrades Advanced Glassfiber

Standard & Poor's downgraded Advanced Glassfiber Yarns LLC and put the ratings on CreditWatch with negative implications. Among the changes, S&P cut the senior secured bank loan to B from B+ and subordinated debt to CCC+ from B-.

S&P said the downgrade reflects continued weakness in key electronics and, to a lesser extent, industrial end markets. The CreditWatch listing reflects uncertainty regarding the outcome of negotiations to amend the company's bank credit agreement. Management has indicated that the company is unlikely to be in compliance with existing financial covenants as of Dec. 31, 2001, S&P said.

The rating agency commented that financial performance could "come under increased pressure if sales to construction end markets - which have held up relatively well so far - decline. Although reductions in inventories, capital spending, and operating costs should permit the company to operate without increasing debt significantly, cash flow generation is likely to remain weak relative to already aggressive debt levels. In addition, the company faces meaningful near-term debt maturities."

S&P downgrades BGF Industries

Standard & Poor's downgraded BGF Industries Inc. Ratings downgraded include the senior seucred bank loan cut to B from B+ and the subordinated debt, cut to CCC+ from B-. The outlook is negative.

S&P said the downgrade reflects expectations that "poor conditions in electronics and filtration end markets will persist in the near term, and that sales to the aerospace sector will deteriorate, causing credit protection measures to weaken more than had been expected. In addition, financial flexibility has been reduced following a recent amendment to the company's bank credit agreement."

The rating agency commented that in the near term, "continued sales weakness and low capacity utilization and are expected to keep EBITDA interest coverage very weak at about 1 time. However, completion of a significant capital project, lower inventories, and workforce reductions should lessen cash needs meaningfully during the next few quarters, curbing further deterioration in the credit profile."

S&P cuts Sleepmaster to D

Standard & Poor's cut Sleepmaster LLC's ratings to D after the company missed the interest payment due Nov. 15, 2001 on its notes maturing 2009.

S&P previously rated the senior subordinated notes at CC and the bank loan at CCC-.

S&P cuts Western Wireless outlook to negative

Standard & Poor's cut its outlook on Western Wireless Corp. to negative from stable. Ratings affected include the senior secured bank loan at BB and the senior subordinated debt at B+.

S&P said it lowered the outlook because of "a decline in the company's domestic operating cash flow that, combined with increased cash losses in its international operations, have severely deteriorated consolidated credit protection and profitability measures."

The rating agency noted the company has a strong market position in its rural service areas and there is a relatively low wireless penetration rate in its territories. "These factors are partially offset by the increased competitive environment and continuing cash flow losses in its international operations," S&P said.

S&P lifts Rogers Cable to investment grade

Standard & Poor's upgraded Rogers Cable Inc, lifting it to investment grade from junk.

Affected ratings include the company's second priority debentures due 2014, its debentures due 2012, its notes due 2002, its secured second priority notes due 2005 and its senior secured second priority debentures due 2007, all raised to BBB- from BB+.

Moody's cuts LodgeNet outlook to negative.

Moody's Investors Service reduced the outlook for LodgeNet Entertainment to negative from stable, affecting $375 million of debt securities. Affected ratings include the $150 million of 10¼% senior unsecured notes due 2006, rated B1, and the $75 million senior secured revolver due 2006 and $150 million senior secured term loan due 2006 both rated Ba3.

Moody's said it cut the outlook because of "the dramatic slowdown in hotel occupancy rates following the Sept. 11 terrorist attacks, combined with Moody's expectation that current economic weakness may be more prolonged than previously anticipated, and that business and leisure travel will remain depressed well into next year, which would likely have a negative impact on LodgeNet's business operations."

It added: "While the company's properties have reportedly seen a partial recovery from the 25%-30% decrease in occupancy levels immediately following Sept. 11, management's guidance of an estimated 3.5%-6.5% decrease in occupancy rates for 2002 may be overly optimistic in Moody's estimation. If the current economic slowdown were to become more severe and/or protracted, as is expected by Moody's, a considerably sharper drop in occupancy rates could reasonably be expected."

Moody's downgrades FelCor, rates planned new notes Ba3

Moody's Investors Service downgraded FelCor Lodging Trust and assigned a Ba3 rating to the company's planned new issue of senior unsecured notes. A total of $1.5 billion of debt securities is affected, including the long-term debt, cut to Ba3 from Ba2 and the preferred stock cut to B1 from B2. The outlook is negative.

Moody's put FelCor and several other lodging REITs on review for possible downgrade after the Sept. 11 terrorist attacks.

Moody's said that after Sept. 11 "FelCor, like most of its peers, experienced steep year-over-year declines in Revenue per Available Room (RevPar) in September and October, as both business and leisure travelers sharply reduced their air travel, one of the main generators of demand for the full-service hotel portfolio of the REIT.

"Weak operating results have prompted the REIT to amend its line of credit agreement to relax certain financial covenants, with which it was in full compliance. These new covenants give FelCor greater flexibility. Although in recent weeks there has been some improvement in hotel occupancies, it is widely expected that negative RevPar trends measured at least in the high teens will continue through the end of 2001."

Moody's also believes the longer term prospects for recovery remain highly uncertain in the industry.

Moody's downgrades XO

Moody's Investors Service downgraded XO Communications, Inc., affecting $6.8 billion of debt securities. Ratings reduced include the senior secured credit facility, lowered to Caa3 from B3, and the senior notes, cut to Ca from Caa1, the subordinated notes and the convertible subordinated notes, lowered to C from Caa2, and the preferred stock, the exchangeable redeemable preferred stock and the convertible redeemable preferred stock, all lowered to C from Caa3.

Moody's said the downgraded follows release of XO's third quarter earnings.

Moody's noted XO now says it is funded into the second half of 2002, compared to expectations of sufficient liquidity through the first half of 2003 in April 2001.

Moody's said it "believes that third quarter repurchase of senior notes and preferred stock for $288 million in cash is largely responsible for this contraction of the company's estimated funding time line. In addition XO noted that it has retained an investment banking firm to provide financial assistance in evaluating strategic alternatives to position the company to obtain additional funding including transactions designed to achieve a restructuring of the company's balance sheet. The company anticipates that such restructuring may entail a significant conversion of debt and preferred securities into common equity. There can be no assurance that such restructuring can be accomplished outside of bankruptcy proceedings."

The rating agency believes it will be "difficult" for XO to raise additional funding in the current market.

"Accordingly, absent additional unidentified funding, we do not expect that the company will be able to sustain its current business plan in the short term," Moody's said.

S&P rates new Vail notes B

Standard & Poor's said it rated Vail Resorts Inc.'s new 8.75% senior subordinated notes due 2009 at B.

S&P cuts Simcala to D

Standard & Poor's said it cut Simcala Inc.'s ratings to D including its 9 5/8% notes due 2006, formerly rated at C.

S&P puts CommScope on positive watch

Standard & Poor's put CommScope Inc.'s ratings on CreditWatch positive, including its $150 million of 4% convertible subordinated notes due 2006 rated B+ and its $360 mil senior secured credit facility rated BB+.

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