S&P cuts Amazon.com outlook to negative

Standard & Poor's cut its outlook on Amazon.com to negative from stable and affirmed its ratings, including the B senior unsecured debt rating and the CCC+ subordinated debt rating.

S&P said the change is in response to its concern about "Amazon's decelerating revenue growth, which makes reversing its historical operating losses much more challenging."

The rating agency also said it was concerned that Amazon's cash position is declining.

Year-on-year, Amazon reported flat sales in the third quarter after "only" 15% growth in the second quarter and 22% in the first. The company also said it expects to have only $550 million of cash and marketable securities at March 31, 2002, which is below Standard & Poor's expectations and is less than the $643 million it had on the balance sheet at March 31, 2001.

S&P commented: "The ratings on Amazon.com reflect the risks of rapid growth in an evolving marketplace, ongoing operating losses, and a heavy debt burden. These risks are tempered by the company's position as the leading on-line retailer of books and music."

Moody's puts Anthem Insurance on review for upgrade

Moody's Investors Service put Anthem Insurance Cos. Inc.'s ratings on review for possible upgrade. Moody's rates the 9% and 9 1/8% surplus notes of Anthem at Baa3.

Moody's said the review was prompted by Anthem's "improved operating earnings in recent years, its stable balance sheet and the successful integration of its recent acquisitions."

The rating agency added: "Anthem Insurance has an established position in regional group health business in the Midwest, East and West, improved strategic focus, and a good quality investment portfolio. These strengths are offset by an increasingly competitive health care market, the threat of federal and state health care reform initiatives, and increasing capital demands."

Moody's added that demutualization - Anthem is planning to take this step with an offering of stock and convertibles - offers "tangible and intangible benefits for Anthem Insurance, including improved access to capital and a more disciplined financial culture. Moody's also recognizes that as a subsidiary of a publicly-owned holding company, Anthem Insurance may face new pressures to help meet its parent's debt service requirements, which may restrict its financial flexibility somewhat. Accordingly, the rating review will focus on Anthem, Inc.'s growth plans, its appetite for increased financial leverage and its anticipated operating performance for the medium term."

Moody's rates ASML convertibles B2

Moody's Investors Service has assigned a B2 rating to the new ASML Holding NV $500 million of 5.75% convertible subordinated notes due 2006, and confirmed ASML's outstanding ratings, concluding a review commenced on the ASML's announced acquisition of Silicon Valley Group Inc. Moody's said the ratings outlook is negative. ASML stock ended up 85c to $15.03.

Fitch puts Cox Enterprises on watch, negative

Fitch put Cox Enterprises Inc.'s BBB+ senior unsecured debt rating on watch, negative, reflecting weakening in Cox's balance sheet and a significant increase in leverage as measured by debt-to-EBITDA both from higher debt levels and declining EBITDA. The resolution of the watch will be determined by the company's ability to execute a plan to reduce debt over the near term, Fitch said. Cox Communications, parent of Cox Enterprises, stock ended down 67c to $39.48.

S&P downgrades Cypress Semiconductor convertibles to B from B+

Standard & Poor's said it downgraded Cypress Semiconductor Corp., including lowering its $175 million of 6% convertible subordinated notes due 2002, its $250 million of 4% convertible subordinated notes due 2005 and its $250 million of 3¾% convertible subordinated notes due 2005 to B from B+. The outlook is stable.

S&P said the action reflects "ongoing stresses" in the data networking market, leading to debt protection measures that are "likely to remain subpar for the former rating over the next several quarters."

The rating agency continued: "While the company has strengthened its product portfolio through internal development and acquisitions in the last several quarters, a high percentage of Cypress' revenues are subject to severe pricing pressures and volatile demand."

Cypress' sales for the September 2001 quarter were down only 3% from the June quarter but half the September 2000 level, S&P noted. EBITDA (earnings before interest, taxation, depreciation and amortization) fell to $35 million from $156 million a year earlier.

S&P rates Atmel convertibles CCC+

Standard & Poor's assigned a B corporate credit rating to Atmel Corp. and a CCC+ rating to its $512 million zero-coupon convertible subordinated debentures due 2021. The outlook is negative.

S&P said its ratings reflect "weak market conditions, a high cost structure, and substantial near-term cash obligations, offset in part by the company's moderate business diversity and currently good liquidity."

The rating agency noted that Atmel's revenues have "declined substantially" in the past few quarters, due to the company's high reliance on commodity products. Revenues for the September 2001 quarter were $295 million, or 56% of the year-earlier level while EBITDA was breakeven for the quarter compared to $188 million for the same period a year before.

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