Moody's downgrades Young Broadcasting

Moody's Investors Service downgraded Young Broadcasting's ratings, affecting $1.8 billion of debt. Among the reductions, Moody's cut Young's $800 million of bank credit facilities to Ba3 from Ba2 and its $750 of million senior subordinated notes to B3 from B2. It rated Young's planned $250 million of senior unsecured notes B2. The rating outlook is developing.

Moody's said its downgraded reflects the increasingly weak advertising sector coupled with the expectation of a more significant deterioration in Young's performance for the balance of the year given the uncertainties associated with the depth of the advertising downturn and US recession.

"While Young's revenues have a significant local composition (approximately 60%), Moody's believes weakness among local advertisers may accelerate given the current environment," the rating agency said. "To date, national advertising has decreased at about twice the pace of local."

Moody's added that the developing outlook is specifically concerned with the uncertainty regarding KRON's performance beginning in 2002. "KRON's performance may deteriorate less dramatically than previously expected given the diminished threat from Granite's San Jose/San Francisco station and the uncertainty regarding the termination of its affiliation with NBC. If it were not for the potential improvement in our expectations for KRON, Young's outlook would remain negative."

Moody's downgrades Asia Pulp & Paper

Moody's Investors Service downgraded Asia Pulp & Paper Co. Ltd., affecting $7.5 billion of securities. Among the ratings reduced were the senior unsecured debt, lowered to Ca from Caa3 and the subordinated debt and preferred stock, lowered to C from Ca. Included are APP International Finance Co. BV's secured global notes and euro MTN program, APP Finance (IX) Ltd.'s global notes, APP Finance (VI) Mauritius Ltd.'s LYONS, APP Finance (VII) Mauritius Ltd.'s convertible global bonds, APP International Finance (Mauritius) Ltd.'s global MTN program, PT Indah Kiat Pulp & Paper Corp.'s secured euro notes, Indah Kiat International Finance Co. BV's secured global notes, Indah Kiat Finance Mauritius Ltd.'s global bonds, Tjiwi Kimia Finance Mauritius Ltd.'s global notes, Pindo Deli Finance Mauritius Ltd.'s global bonds and APP China Group Ltd.'s senior unsecured notes, all lowered to Caa3 to Ca; and APP Global Finance (III) Cayman Ltd.'s euro notes backed by preference shares and APP Finance (II) Mauritius Ltd.'s preferred stock, both lowered to C from Ca.

Moody's said the downgrade reflects its concern that "creditor interests will be further impaired by the lack of progress on the debt restructuring program that was put in place in March 2001 when the APP Group announced a debt standstill."

The recent resignation of auditors Arthur Anderson "will further delay the availability of audited financial information, and in turn affect the progress of negotiations on debt restructuring," Moody's said.

It added: "The rating downgrade also reflects the deteriorated expected recovery rate and the apparent uncertainty in resolving creditors' claims under Indonesian law."

Moody's puts Kmart on review for downgrade

Moody's Investors Service put Kmart Corp.'s ratings on review for possible downgrade, affecting $4.9 billion of debt. Included are: Kmart's senior unsecured debt and medium-notes rated Baa3, its lease certificates rated Ba1.

Moody's said its action is based on "the continued challenge that the company faces in significantly improving profitability, inventory efficiency, and cash flow as it seeks to revitalize its business in a difficult competitive and economic environment."

It added: "The review will focus on the financial impact, both positive and negative, from initiatives that are underway to improve the operations and working capital management and the potential for these improvements to have a significant benefit in reducing debt levels in a reasonable time-frame. The review will also focus on understanding the sustainability of improvements that have already been made to its operations and the timing of further potential improvements."

Moody's said a new management team has "made significant progress," including improving stocks in stores, raising customer satisfaction and better supply chain management.

"However, these operational improvements have not yet delivered the kind of overwhelming evidence, namely significant improvement in profit levels, that would allow us to view a decline in debt levels as an imminent event," the rating agency said.

Moody's lowers LIN Holdings/LIN Television

Moody's lowered LIN Television's $200 million of senior unsecured notes due 2011 to B2 from B1, and the its $300 million senior subordinated notes due 2008 to B3 from B2.

Moody's also lowered LIN Holdings' ratings, including its $400 million accrual notes due 2008 to Caa1 from B3, and senior unsecured issuer rating to Caa1 from B3.

LIN Television's Ba3 bank facility ratings were confirmed, the company's senior implied rating was lowered to B1 from Ba3. The outlook is negative.

The actions, according to Moody's, "reflect the effect of the increasingly weak advertising sector (including the lack of political and Olympic advertising) on LIN's financial performance during the first half of 2001 coupled with the expectation of a more significant deterioration in the performance for the balance of the year given the continued weakness in the advertising market and general weakness in the economy."

The B2 rating on LIN Television's senior unsecured notes reflects their effective subordination to the senior secured facilities; the B3 rating on the senior subordinated notes reflects their contractual subordination to both the bank debt and senior notes, the rating agency said.

The Caa1 rating on LIN Holdings' accrual notes reflects the structural subordination of the notes to all the liabilities of the operating company, the release stated, adding that the accrual notes are structured to become cash pay in 2003 at which point the accrued interest, approximately $125 million, will be repaid through its recently negotiated bank facility.

Moody's downgrades Carrier1 to C

Moody's Investors Service downgraded Carrier1 International SA to C from Caa2, affecting $237.1 million of debt. Included in the action are the company's €85 million of 13¼% senior unsecured notes due 2009 and its $160 million of 13¼% senior unsecured notes due 2009.

Moody's downgraded the debt in response to Carrier1's announcement of a cash tender offer for all its outstanding high-yield notes. The company also indicated it could experience difficulty in meeting its August 2002 interest payment obligations and stated that its ability to continue to fund its operations depends on whether it can reduce capital expenditure and costs significantly, eliminate all or a substantial portion of its debt and conserve cash required to fund operations until it is cash flow positive, Moody's said.

Although Carrier1 has not defaulted, the exchange respresents a default under Moody's definitions.

Moody's downgrades Trump A.C., Trump Castle

Moody's Investors Service downgraded Trump Atlantic City Associates to Caa3 from B3 and Trump's Castle Funding, Inc. to Caa3 from Caa1 and kept both on review for further possible downgrade. Ratings on Trump Hotels and Casino Resorts Holdings, L.P. were confirmed. Specifically, Moody's cut Trump Atlantic City Associates' $1.3 billion 11.25% first mortgage notes due 2006 to Caa3 from B3; Trump's Castle Funding's $242 million 11.75% mortgage notes due 2003 to Caa3 from Caa1 and confirmed Trump Hotels & Casino Resorts Holdings's $155 million 15.5% senior secured notes due 2005 rated Ca.

Moody's took the action in response to the company's failure to make a schedule interest payment on the $1.3 billion Trump Atlantic City 11.25% first mortgage notes due on November 1, 2001. Additionally, Moody's said, the downgrade incorporates the company's decision not to make future interest payments on its public debt until it completes successful negotiations with bondholders.

Although Trump had the ability to make the November 1, 2001 scheduled interest payment, the company announced it would not make the payments because, in addition an already weakening economy, it expects future gaming in New York State will severely affect operating performance in Atlantic City, N.J., Moody's noted.

S&P downgrades Global Crossing, Asia Global Crossing

Standard & Poor's downgraded Global Crossing Holdings Ltd., Frontier Corp. and Asia Global Crossing Ltd.

Issues affected include Global Crossing's $900 million 9 1/8% senior notes due 2006, $1.1 billion 9½% senior notes due 2009, $1 billion 8.7% notes due 2007 and $800 million 9 5/8% senior notes due 2008, all cut to B- on CreditWatch Negative from BB-on CreditWatch Negative, its $500 million preferred stock cut to CCC+ on CreditWatch Negative from B on CreditWatch Negative, and its $1 billion secured bank loan, cut to B+ on CreditWatch Negative from BB+ on CreditWatch Negative, its $1 billion 6 3/8% cumulative convertible preferred stock, $500 million 7% cumulative convertible preferred stock and $1 billion 6¾% convertible preferred stock, all cut to CCC+ on CreditWatch Negative from B on CreditWatch Negative; Frontier Corp.'s $100 million 9% debentures due 2021, $300 million 7¼% notes due 2004 and $200 million 6% Dealer Remarketable Securities (DRS) due 2003, all cut to B- on CreditWatch Negative from BB- on CreditWatch Negative and Frontier's $6 million 5% cumulative preferred stock to CCC+ on CreditWatch Negative from B on CreditWatch Negative; and Asia Global Crossing's $408 million of 13 3/8% senior notes due 2010 to B- on CreditWatch Negative from B+ and CreditWatch Developing.

Moody's puts Asarco on review for downgrade

Moody's Investors Service put Asarco Inc.'s rating on review for possible downgrade, affecting $1 billion of debt including its B1 rated senior secured revolving credit facility and B3 senior unsecured notes, debentures and industrial revenue bonds.

The rating agency said its action reflects its concerns over "the deterioration in the underlying fundamentals for Asarco's business, which is highly leveraged to the copper market, and its ongoing loss position, weak EBITDA, and deteriorating debt protection measures. At the same time, Asarco's overall debt level remains high and cash flow is strained."

Moody's noted that for the first six months of 2001, Asarco's production of copper, zinc and silver declined with consolidated revenues dropping 21% to $502 million. Despite an 11% decline in copper prices, cost control contributed to a small operating profit of $3.5 million.

Since then, Moody's said, market conditions have continued, with prices falling a further 16% to an approximate average of $0.61 in October, "well below Asarco's cash operating costs."

Moody's added that it expects "downward price pressure to persist, which will cause earnings pressure for Asarco on an operating basis. Furthermore, given the company's interest expense requirements on high debt levels, a net loss position is likely to continue."

S&P upgrades Unilab

Standard & Poor's upgraded Unilab Corp., including raising its $155 million 12¾% senior subordinated notes due 2009 to B from B- and its bank debt to BB- from B+.

S&P rates ResCare upcoming offering

Standard & Poor's rated ResCare Inc.'s upcoming offering of $150 million senior notes due 2008 at B.

S&P rates IndyMac WIRES B+

Standard & Poor's rated the $150 million of Warrants & Income Equity Securities Units to be offered by IndyMac Capital Trust I at B+.

Fitch upgrades MRS Logistica

Fitch upgraded MRS Logistica SA, including raising its series A and series B notes due 2005 to BB- from B+ as part of raising its senior unsecured foreign currency rating. The local currency rating rose to BB from B+. The outlook is negative.

Fitch said the ratings are supported by MRS Logistic's position as the sole provider of rail services for its major customers and limited competitive threats.

"An improving ownership structure composed of industry leading companies with strong credit fundamentals further supports MRS' ratings," Fitch continued. "The ratings are constrained by MRS' high leverage, its exposure to conditions in the iron ore and steel industries and its susceptibility to catastrophes due to a single track along portions of its major service areas."

The upgrade follows approval by European anti-trust authorities for the joint acquisition of Caemi by Mitsui and CVRD. Fitch said the new ownership of Caemi will enhance the implicit support MRS Logistica has received.

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