Moody's rates Temple-Inland convertible at Baa3

Moody's assigned a Baa3 rating to Temple-Inland's new $500 million convertible.

Moody's outlook for Temple-Inland's ratings remains negative.

While the company has successfully repaid a portion of the $900 million bridge loan through recent equity and convertible offerings, Moody's said, it must still address maturing bank agreements and liquidity.

Moody's expects to consider shifting the rating outlook to stable when the company has refinanced the bridge loan in its entirety, when the maturing bank agreements have been refinanced and when liquidity generally improves.

S&P puts Ameren on negative watch

Standard & Poor's placed its ratings of Ameren Corp. and regulated subsidiaries on watch with negative implications. Ameren's unregulated generating subsidiary AmerenEnergy Generating Co. was placed on watch with positive implications. Ameren senior unsecured debt and preferred stock are rated A.

The watch follows Ameren's announcement that it reached an agreement with AES to acquire CILCORP for $1.4 billion, including the assumption of about $875 million of debt and $41 million of preferred stock.

The $500 million cash portion of the acquisition price is expected to be significantly funded with proceeds from new equity financings by Ameren.

When the acquisition is completed, S&P expects the corporate credit ratings of Ameren and subsidiaries to be in the A category.

Moody's puts Ameren on review for downgrade

Moody's placed the ratings of Ameren Corp. under review for possible downgrade, including senior unsecured debt at A2 and commercial paper at P-1, following Ameren's agreement to purchase CILCORP from AES Corp for $1.4 billion.

Moody's said it had the opportunity to review the acquisition in advance and determined that, as presently envisioned, it would likely result in a one notch downgrade of Ameren's issuer and senior unsecured debt rating to A3 from A2 and a one notch downgrade of Ameren's commercial paper rating to P-2 from P-1.

CILCORP's comparatively high leverage and low consolidated coverage ratios will weaken the quality of cash flow upstreamed to Ameren, Moody's said.

Although CILCORP is being acquired by a higher rated parent company, Moody's does not believe there is sufficient free cash flow available either at Ameren or any of Ameren's other subsidiaries to provide substantial support to CILCORP.

S&P affirms Nvidia ratings

Standard & Poor's affirmed its ratings on Nvidia Corp. and removed it from CreditWatch with negative implications after the company's announced completion of its internal accounting review, performed at the request of the SEC and presumes no further related action by the SEC. Ratings affected include Nvidia's 4¾% convertible subordinated notes due 2007 at B-.

Ratings reflect the company's good position in the computer graphics chip market, offset by challenges of rapid technology evolution and aggressive competition.

Complex technological challenges that can lead companies to miss product introductions, negatively affecting market positions, remain a risk in the graphics chip segment. Nvidia's financial profile is adequate for the ratings level and includes cash balances of about $800 million as of January 2002.

Nvidia said it would adjust certain product and operating costs for accounting errors, revisions to accounting estimates and reversals of prior adjustments in fiscal years 2000, 2001 and 2002.

Importantly, S&P noted, there is no restatement to the company's cash position. The adjustments involved are relatively small, impacting net income less than $4 million in each of the three fiscal years.

While technological risks continue to limit the ratings upside, a good technology base and adequate financial flexibility support the current ratings level.

Moody's rates Titan's loan Ba3, negative outlook

Moody's Investors Service assigned a rating of Ba3 to Titan Corp.'s new $450 million secured credit facility, which consists of a $100 million revolver and a $350 million term loan B. In addition, Moody's confirmed ratings of B2 on its $250 million 5.75% convertible preferred securities due in 2030 issued by Titan Capital Trust, its Ba3 senior implied rating and its B1 senior unsecured issuer rating. The rating outlook was changed to negative from stable.

The new credit facility is secured by a perfected first priority lien on total assets and proceeds will be used to refinance existing indebtedness and support other general corporate purposes.

Negative factors affecting the ratings include, concern over Cayenta, e-business Solutions, negative EBIT performance, weak EBITA return on assets of less than 10%, goodwill of about $651 million exceeding equities of about $613 million at Dec. 31, 2001, high financial leverage, deficit free cash flow and the likeliness that the company will rely on external borrowings to finance working capital requirements and capital expenditures, according to Moody's.

Positive factors affecting the ratings include, the strength of the company's core business, Titan Systems, the strategic shift away from commercial businesses, a leading position in niche markets, solid pro-forma backlog at $3 billion and high percentage win rates, Moody's said.

"The negative ratings outlook reflects the softening of key credit statistics which may be exacerbated by integration risks associated with the recent acquisitions of GlobalNet, Inc., Jaycor, Inc., and Science and Engineering Associates," the rating agency said. "Moreover, the outlook incorporates the likely continuation of an acquisitive growth strategy. Further tightening of credit matrices could result in a ratings downgrade."

At Dec. 31, 2001, pro-forma debt was about $637 million to EBITA of about $90 million at 7.0 times and EBITDA less capital expenditures coverage of pro-forma interest expense was approximately 2.4 times

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