S&P says Universal City unchanged

Standard & Poor's said on Universal City Development Partners Ltd.'s ratings are unchanged including its corporate credit at B+ with a stable outlook in response to the news that General Electric Co. has entered into exclusive negotiations with Vivendi Universal SA for a merger of Vivendi Universal Entertainment LLLP and NBC.

Universal City is a joint venture of the Blackstone Group and Vivendi Universal Entertainment.

S&P said the rating on Universal City Development Partners is unlikely to be raised over the near- to intermediate-term given its about the company's high business risk and the poor operating environment.

The rating is heavily influenced by the company's geographic concentration of earnings, cyclical and seasonal operating performance and its heavy debt burden. Nearly all of its profits are derived from two theme parks, Universal Studios Florida and Islands of Adventure, which are in a competitive battle with market leader Walt Disney World.

Performance has been negatively affected by the declines in consumer travel and leisure spending, which are unlikely to meaningfully rebound in 2004. Longer-term rating upside would depend on superior operating performance, sustained market share gains and consistent reductions in debt leverage, S&P said.

Fitch confirms Grupo Elektra

Fitch Ratings confirmed Grupo Elektra, SA de CV including its $275 million 12% senior notes due 2008 at BB-. The outlook is stable.

Fitch said the ratings are based on Elektra's leading market position as a specialty retailer of electronics, appliances and furniture, a strong brand name and extensive nationwide store network and the ability to provide customer financing. The installment sales program available to Elektra's low to middle-income customer base creates additional demand and provides a competitive advantage. Customer financing has also helped limit revenue volatility.

Due to its strong business position and large scale economies, Elektra maintains above average profit margins.

Because revenues are largely peso-denominated while the debt is mostly dollar-denominated, the company is exposed to long-term foreign-exchange fluctuations, Fitch noted. Elektra has indicated it intends to reduce such exposure and has recently repaid dollar debt with cash at hand and the proceeds from the issuance of peso-denominated short-term notes and the sale of assets to Banco Azteca.

At June 30, 2003, Elektra's on-balance-sheet debt was approximately $374 million, representing a reduction of $112 million from Dec. 31, 2002, Fitch said. Elektra also completed the amortization of its off-balance-sheet securitization program for approximately $227 million. Credit protection measures should remain consistent with Elektra's existing rating category.

Fitch estimated that by the end of 2003 the ratio of total debt-to-EBITDAR should be around 2 times and the ratio of EBITDAR-to-interest expense plus rent should be around 3x.

Moody's raises Reliance Industries outlook

Moody's Investors Service raised its outlook on Reliance Industries to stable from negative including its debt securities at Ba2.

Moody's said the outlook change reflects the ongoing strong operating performance of the Reliance Industries group as witnessed most recently in its first fiscal quarter 2003 results, the belief that risks associated with Reliance Industries substantive investments in affiliate companies (such as Reliance Infocomm) is abating based on Moody's understanding of to-date performance and its assessment of ongoing investments required in these affiliated companies and a better understanding of ongoing capex plans across the petrochemical, oil & gas, refining and infocomm businesses which Moody's believes will be manageable within the context of the group's own cashflow generating capacity.

The Ba2 rating continues to reflect the Reliance group's entrenched domestic positions in its petrochemical activities including very strong market shares, its world-class production facilities with strong economies of scale, as well as the group's strong margin performance and good cashflow generation in petrochemicals and derivatives.

The ratings, however, also continue to acknowledge the group's fairly leveraged profile (on an adjusted interest cover, capitalization, and cashflow/debt basis); ongoing significant expansion plans, including in more speculative areas (for Reliance Industries) such as telecoms as well as petroleum marketing, where Reliance is bidding for HPCL (which Moody's expect to result in negative free cashflow generation for the group over the next 1-2 years); as well as the group's predominant presence in largely cyclical commodity petrochemical and refining businesses, Moody's said.

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