Moody's rates River Rock notes B2

Moody's Investors Service assigned a B2 rating to River Rock Entertainment Authority's proposed $190 million senior notes due 2011. The outlook is stable.

Moody's said River Rock's ratings reflect its short operating history, dependence on a single market and small revenue and cash flow base.

River Rock's gaming and entertainment facility, located in Sonoma County, Calif., began limited operations on Sept. 14, 2002. The full facility has only been open since June 18, 2003. Revenue and EBITDA for the six-month period ended June 30, 2003 were about $24.6 million and $7.6 million, respectively, with a majority of those amounts being generated in the three-month period ended June 30, 2003.

Other credit concerns include construction and development risks and the possibility that the facility may not be insured against loss in the event of a landslide. There have been two landslides since the operations began, although neither one disrupted River Rock's operations. In addition to increasing the amount of available parking, the construction project includes infrastructure improvements intended to prevent future possible landslides near the facility.

The rating also takes into account the likely difficulty senior unsecured bondholders would face in recovering their investment in a liquidation scenario. Currently, there is uncertainty regarding whether an Indian tribe can be a debtor under the U.S. bankruptcy law and whether a creditor would be protected under that same law.

Positive ratings consideration is given to the favorable demographics and limited amount of competition in the immediate market area, Moody's said. While River Rock has several existing competitors in the Northern California area, the amount of direct competition is not material and not likely to increase over the next several years. Additionally, Moody's expects that the new parking structures will benefit the facility which is currently parking constrained. The ratings also acknowledge the security interest that bondholders will have in the various cash accounts and reserve accounts related to the expansion project.

Moody's cuts Coca-Cola Erfrishungsgetränke to junk

Moody's Investors Service downgraded Coca-Cola Erfrishungsgetränke AG to junk including cutting its €250 million notes due February 2004 and €500 million notes due July 2005 to Ba1 from Baa2. The outlook is stable.

Moody's said the downgrade reflects its view that Coca-Cola Erfrishungsgetränke credit metrics, which were very weak at December 2002, are not expected to improve materially over the intermediate term with total cover not expected to reach 1.0x over this timeframe; that the competitive environment in Germany is expected to remain very challenging in particular in the key high volume retail channel where the discount formats dominate; the continued uncertainty in connection with further changes in packaging legislation that may impact Coca-Cola Erfrishungsgetränke; that the company remains wholly reliant upon the support of Coca Cola Gmbh.

Although the Control and Profit and Loss Agreement with Coca Cola Gmbh does not guarantee the repayment of Coca-Cola Erfrishungsgetränke's financial obligations of €275 million falling due within the next 12 months, Moody's believes that the nature of the relationship between The Coca Cola Co. and Coca-Cola Erfrishungsgetränke is such that Coca Cola will support the maintenance of an adequate overall liquidity profile of the issuer in order to facilitate the repayment of its debt obligations when due.

S&P rates Petrobras Energia bonds B-

Standard & Poor's assigned a B- rating to Petrobras Energia SA's new 9.35% $100 million 10-year bonds. The outlook is stable.

S&P said issuance of the new instrument reflects an improved financial flexibility for the company based on Petrobras' ownership. Given that the proceeds will be applied to repayment of short-term financial debt, the maturity schedule of the company will improve.

The ratings also incorporate the potential support from the company's main shareholder, Petroleo Brasileiro SA, the company's strong export profile, geographic diversification, low cost structure and geological knowledge of the region, S&P said.

PESA's financial flexibility is limited by current market conditions and the company's financial profile. Although no capital infusions or financial aid by the shareholder are expected in the near term, the existence of cross-default clauses between Petrobras' indebtedness and PESA's debt results in an incentive for the former to support its subsidiary. According to S&P's criteria, the mere existence of such clauses does not merit equalization of the ratings. Nevertheless, in the current case, S&P factors into the ratings some potential support to PESA from its parent, Petrobras.

S&P raises Dollar Financial outlook, rates notes B

Standard & Poor's assigned a B rating to Dollar financial Group's proposed $200 million eight-year senior notes and raised its outlook to stable from negative. Existing ratings, including the B+ long-term counterparty credit rating were confirmed.

S&P said that issuance of the notes will have a marginal impact on the company's leverage position, as it will use proceeds to reduce its borrowings under its existing revolving credit facility and redeem its outstanding 10.875% senior notes due 2006 and 10.875% senior subordinated notes due 2006.

The outlook revision reflects Dollars' increased funding flexibility as, upon completion of the $200 million issuance, the company will have approximately $48 million of availability under its newly negotiated credit facility, S&P said. This will reduce the company's dependence on its banking partners to fund its payday lending activities, and as such add a level of funding flexibility should the current funding arrangements through its bank partners be interrupted.

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