S&P downgrades Nortel to junk

Standard & Poor's downgraded Nortel Networks Ltd. by three notches to junk. The outlook remains negative.

Ratings lowered include Nortel Networks' $1.5 billion 6.125% notes due 2006, $200 million 6% notes due 2003, $200 million 6.875% notes due 2023 and $300 million 6.875% notes due 2002, all cut to BB- from BBB-, its preferred stock, cut to B from BB, Nortel Networks Capital Corp.'s $150 million 7.4% debentures due 2006, $150 million 7.875% debentures due 2026 and $1.5 billion 4.14% senior unsecured convertible notes due 2008, all cut to BB- from BBB-.

Moody's puts Corrections Corp. of America ratings on review for upgrade

Moody's Investors Service put the ratings of Corrections Corp. of America on review for possible upgrade. Ratings that are being reviewed include the B3 senior unsecured debt rating, the B2 secured bank facility rating and the Caa2 preferred stock rating.

"A key factor in Moody's review will be the refinancing of much of its debt, which matures on December 31, 2002," the Moody's release said. "Assuming the firm refinances this debt, extends its maturities, and the loan covenants remain substantially the same, Moody's anticipates a one-notch upgrade of all its ratings."

The company's current rating, according to the release, reflects "successful re-organizational effects from its conversion to a C-Corporation from a REIT", management's progress in dealing with the company's liquidity needs, "operational challenges", the skipping of preferred stock Series A dividends, which were recently made current, success in addressing shareholder litigation and positive earnings momentum with additional contracts.

Moody's lowers Mattress Discounters unsecured debt ratings

Moody's Investors Service downgraded Mattress Discounters Corp's unsecured debt rating due to liquidity concerns, a Moody's release said. The company's $140 million 12.675% senior notes due 2007 were lowered to Ca from Caa3, the $30 million secured revolving credit facility was lowered to Caa1 from B3, the senior unsecured issuer rating was lowered to Ca from Caa3 and the senior implied rating was lowered to Caa3 from Caa1.

According to the release, the company has limited liquidity and high debt levels. There is an expectation that noteholders will experience "a significant loss of principal in a restructuring or default," the release said. The senior implied rating was downgraded due to "a high potential for default" because of operating losses, a higher level of debt and "vendor payable obligations," the release explained. The bank loan, the release added, was downgraded "to reflect the potential for some loss of principal in case of default as a result of lower asset coverage due to higher secured debt levels."

S&P cuts Mpower

Standard & Poor's downgraded Communications Inc. to D. Ratings affected include Mpower's $160 million 13% senior secured notes due and $250 million 13% senior notes due 2010, both cut to D from C.

S&P said its action follows Mpower's bankruptcy filing.

S&P puts Teleglobe on watch

Standard & Poor's put Teleglobe Inc. on CreditWatch with negative implications including its corporate credit rating at BBB+.

S&P said the action reflects its concerns about Teleglobe's near-term liquidity and its ability to refinance its US$1.25 billion bank loan due July 22, 2002 should BCE Inc.'s support of Teleglobe diminish.

BCE is reviewing strategic alternatives regarding Teleglobe, including the possible restructuring of Teleglobe's debt, S&P noted.

So far Teleglobe's ratings have benefited from a significant degree of support due to BCE's indirect financial support of Teleglobe for the buildout of the Globesystem infrastructure network and positioning of Teleglobe as a core, global connectivity operating business, S&P said.

Teleglobe's stand-alone financial performance has deteriorated significantly due to the continued weakness in the sector, the rating agency added. Key to Teleglobe's success was its transition away from voice traffic to data- and Internet-related applications, which it has not been able to achieve.

Moody's raises Grohe outlook

Moody's Investors Service revised its oulook on Grohe Holdings GmbH to positive from stable. Ratings affected include Grohe's €200 million 11.5% senior notes due 2010 at B2 and DEM1.2 billion senior secured credit facilities at Ba3.

Moody's said the outlook change reflects Grohe's continued operating and financial progress since Moody's initially rated the company in October 2000 as well as Moody's belief that Grohe is now well positioned to continue growing internally generated cash flows and further de-leverage the business going forward.

For the full year 2001, Moody's expects Grohe should demonstrate a substantial year-on-year improvement in operating profitability and credit metrics, aided in part by the DEM 96.5 million tax refund associated with the company's revised corporate structure, the proceeds of which were utilized to prepay senior secured indebtedness.

S&P upgrades IWO

Standard & Poor's upgraded IWO Holdings Inc. The outlook is stable.

Ratings affected include IWO's $160 million senior unsecured notes due 2010, raised to CCC+ from CCC and Independent Wireless One Corp.'s $120 million senior secured term loan A, $50 million senior secured term loan B and $70 million senior secured revolving credit facility, all raised to B from B-.

S&P downgrades Mrs. Fields

Standard & Poor's downgraded Mrs. Fields Original Cookies Inc. The outlook remains negative.

Ratings affected include Mrs. Fields' $140 million 10.125% senior unsecured notes due 2004, cut to B from B+.

S&P takes Roma off watch

Standard & Poor's removed Roma Restaurant Holdings Inc. from CreditWatch with negative implications. The outlook is negative.

Ratings affected include Romacorp Inc.'s $75 million 12% senior unsecured notes due 2006 at B and $25 million senior secured revolving credit facility due 2003 at B+.

Moody's rates Associated Materials notes B3, credit facility Ba3

Moody's Investors Service assigned a B3 rating to Associated Materials Inc.'s planned $165 million senior subordinated notes due 2012 and a Ba3 rating to its $165 million senior secured credit facility due 2007-2009. The rating outlook is stable.

Moody's said the ratings reflect Associated Materials' significant increase in debt leverage as a result of the transaction to be financed by the notes and credit facility together with the sizable goodwill and negative tangible net worth created and the possibility that future acquisitions will be financed with increasing amounts of debt.

In addition, the ratings continue to reflect the company's vulnerability to raw material price fluctuations, significant competition and the underlying cyclicality of the homebuilding industry and, to a lesser extent, the remodeling industry.

However, the ratings also reflect Associated Materials' consistent growth in sales and earnings over the last five years, strong returns, and solid interest coverage. The ratings are further supported by Associated Materials' national distribution capabilities for Alside's manufactured products through captive supply centers and the increasing acceptance of vinyl siding and windows in both the residential remodeling market and, more recently, the new construction market, Moody's said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.