Moody's assigns liquidity ratings to 37 high-yield, leveraged loan issuers

New York, Oct. 1 - Moody's Investors Service announced the first of its new Speculative-Grade Liquidity Ratings, making assessments of 37 issuers of high-yield bonds and leveraged loans.

Six companies were given the lowest rating, indicating "weak" liquidity; in Moody's view these issuers are reliant on external sources of financing but the availability of that financing is "highly uncertain." Companies at this level are: American Tower Corp., Atlas Air, Inc., CSC Holdings, Inc. (Cablevision), Graham Packaging Company, LP, RCN Corp. and Revlon Consumer Products Co.

The new SGL rating system, announced last month, is intended to describe a company's ability to meet its obligations through internal resources and available committed sources of financing.

"With the rise in bond defaults over the last two years, market participants have expressed a need for an in-depth examination of liquidity in isolation from other factors that are a part of our traditional bond ratings," said Mike Rowan, managing director and co-head of Moody's Corporate Finance Group, in a news release accompanying the first ratings.

Moody's added that further SGL ratings will be assigned in the coming months. The rating agency added that it intends to cover the largest issuers by dollar amount over "the broadest array of industries possible."

SGL's are short-term ratings on a scale from SGL-1 (very good) to SGL-4 (weak):

- SGL-1 indicates "very good" liquidity. Issuers rated at this level are most likely to have the capacity to meet their obligations over the coming 12 months through internal resources without relying on external sources of committed financing.

- SGL-2 indicates "good" liquidity. Issuers at this level are likely to meet their obligations over the coming 12 months through internal resources but may rely on external sources of committed financing. Access to committed financing is highly likely based on Moody's evaluation of near-term covenant compliance.

- SGL-3 indicates "adequate" liquidity. Issuers at this level are expected to rely on external sources of committed financing. Based on its evaluation of near-term covenant compliance, Moody's believes there is only a modest cushion and the issuer may require covenant relief in order to maintain orderly access to funding lines.

- SGL-4 indicates "weak" liquidity. Issuers at this level rely on external sources of financing and the availability of that financing is highly uncertain in Moody's opinion.

The ratings announced Wednesday are:

Issuer SGL Ratings Senior implied rating

AK Steel Holding Corp. SGL-2 Ba3

Allied Waste North America, Inc. SGL-3 Ba3

Amazon.com, Inc. SGL-2 B2

American Tower Corp. SGL-4 B2

Amkor Technology, Inc. SGL-2 B1

Atlas Air, Inc. SGL-4 B1

AutoNation, Inc. SGL-2 Ba1

Charter Communications Inc. SGL-2 Ba3

Collins & Aikman Products Co. SGL-2 Ba3

Crown Castle International Corp. SGL-3 B1

CSC Holdings, Inc. (Cablevision) SGL-4 Ba3

D.R. Horton, Inc. SGL-2 Ba1

Dean Foods Co. SGL-1 Ba3

Fairchild Semiconductor Corp. SGL-1 Ba3

Graham Packaging Company, LP SGL-4 B2

Juniper Networks, Inc. SGL-1 Ba3

L-3 Communications Corp. SGL-1 Ba2

Lennar Corp. SGL-1 Ba1

LIN Holdings Corp. SGL-1 B1

Mediacom Communications Corp. SGL-2 B1

Nextel Communications, Inc. SGL-1 B1

Owens-Illinois, Inc. SGL-3 B2

Peabody Energy Corp. SGL-1 Ba2

J.C. Penney Co., Inc. SGL-1 Ba2

Pride International, Inc. SGL-3 Ba1

RCN Corp. SGL-4 Caa2

Revlon Consumer Products Co. SGL-4 Caa2

Riverwood International Corp. SGL-3 B2

Sanmina-SCI Corp. SGL-2 Ba1

Service Corp. International SGL-2 B1

Sinclair Broadcast Group, Inc. SGL-2 Ba3

Six Flags Inc. SGL-2 B1

SPX Corp. SGL-1 Ba2

Station Casinos, Inc. SGL-2 Ba3

Tower Automotive, Inc. SGL-2 Ba3

Waste Management, Inc. SGL-2 Ba1

Western Digital Corp. SGL-2 B2

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