S&P rates Lamar unit

Standard & Poor's assigned a B rating to Lamar Media Corp.'s planned $260 million senior subordinated notes. S&P also affirmed the BB- corporate credit rating for Lamar Media and parent, Lamar Advertising Co. The outlook is stable.

Ratings are based on the consolidated credit quality of Lamar Advertising and reflect significant debt levels.

Pro forma debt to EBITDA in the low 5x area.

These factors are tempered by strong and geographically diverse market positions and an emphasis on the better margin and more stable local advertising revenues, S&P said.

In addition, with EBITDA margins in the mid-40% area, manageable capital expenditures and minimal cash taxes, Lamar generates healthy levels of free operating cash flow.

Financial flexibility is provided by availability under the revolving credit facility, which at Sept. 30 there was about $320 million available, plus $59 million in cash.

Liquidity also benefits from meaningful levels of free operating cash flow.

Lamar currently has a heavy bank debt amortization schedule but is in the process of negotiating a new credit facility that would push out required payments, S&P said.

Ratings stability reflects the expectation that, given Lamar's acquisition growth strategy, the overall financial profile will not change meaningfully in the intermediate term.

S&P keeps Omnicare on watch

Standard & Poor's said the ratings on Omnicare Inc. (senior at BBB-) remain on negative watch, but noted that its chief rival in the bid to acquire NCS HealthCare Inc., Genesis Health Ventures Inc., has abandoned its efforts.

This occurred as a result of Delaware Supreme Court's order last week for a lower court to issue an injunction blocking Genesis' bid.

As a result, Omnicare is now in position to acquire NCS.

However, the acquisition cost will increase, since Omnicare's original bid was raised to $5.50 per share from $3.50 per share , and Omnicare agreed to pay Genesis $22 million.

S&P rates Powerchip convertibles B

Standard & Poor's assigned a B rating to Powerchip Semiconductor Corp.'s new $90 million zero-coupon convertibles bonds due 2007.

Fitch rates Phoenix convertibles BBB+, lowers outlook

Fitch Ratings assigned a BBB+ rating to The Phoenix Cos., Inc.'s new issue of $150 million equity units and lowered the outlook on Phoenix to negative from stable.

The negative outlook recognizes that additional deterioration in operating fundamentals or statutory capital levels would put downward pressure on the ratings, Fitch said.

Similarly, Fitch generally views closed blocked securitizations as having negative credit implications. Phoenix has disclosed it is considering a transaction of this type. Fitch would review the Phoenix transaction in the context of size of the transaction, structure and use of proceeds.

Fitch said the new convertible security exhibits substantial equity-like characteristics given the mandatory nature of the stock purchase contracts and the interest deferral feature of the notes.

Adjusted leverage on a pro-forma basis is expected to be approximately 19%, down from 23% at Sept. 30, 2002. Phoenix Companies targets maximum financial leverage of 20%.

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