Moody's puts Snow Brand Milk convertibles on review for downgrade

Moody's put Tokyo-based Snow Brand Milk Products Co. Ltd.'s Series 4 ¥10 billion 1.7% domestic convertible bonds due 2003 and the Series 6 ¥10 billion 1.7% domestic convertible bonds due 2002, which are rated B3, on review for downgrade.

The company's senior unsecured long-term debt ratings were downgraded to Caa1 from B3, and kept on review for further downgrade.

Snow Brand was put on review in February upon it announced that it would liquidate Snow Brand Food, a 66%-owned consolidated subsidiary. The downgrade reflects Snow Brand's decision to provide collateral to the convertible bonds. The introduction of a senior secured level of debt will result in the ¥40 billion in senior unsecured debt securities being subordinated to the newly secured debt securities.

Moody's upgrades WCG Note Trust to Baa2

Moody's upgraded the debt rating of WCG Note Trust's senior secured notes to Baa2 from Baa3 with a negative outlook. The upgrade follows The Williams Companies Inc.'s agreement to pay the debt service on these notes on behalf of the WCG Note Trust, if the Trust's underlying asset (a note from Williams Communications Group Inc., rated Ca senior unsecured) does not provide sufficient amounts to do so.

The WCG Note Trust notes' new rating and outlook reflect Williams' obligations under this payment agreement, which are pari passu Williams' senior unsecured obligations (Baa2 with a negative outlook). The agreement was part of a consent solicitation approved by WCG Note Trust noteholders.

Fitch rates new Costco notes at A+

Fitch Ratings assigned an A+ rating to Costco's $300 million of 5.5% senior notes due 2007. The proceeds from the issuance will assist in the funding of the company's capital expenditure program. The rating outlook is stable.

The rating reflects the company's demonstrated ability of achieving above-average growth in both existing and new markets. Comparable store sales growth is likely to remain positive despite a highly competitive retail environment.

Costco's interest coverage and leverage ratios are favorable, with EBITDAR/total interest plus rents of 11.2 times and total adjusted debt/EBITDAR of 1.2 times for the 12 months ended Nov. 30. In addition, Fitch views the company's high percentage of store ownership of approximately 80% as a positive.

The combination of cash on the balance sheet, cash from operations and access to the short-term capital markets via its commercial paper program provide ample liquidity for future growth.

S&P rates new BAA convertibles AA-

Standard & Poor's assigned an AA- rating to BAA plc's offering of £424 million 2.94% convertible bonds due 2008.

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