S&P rates Banco Votorantim notes B

Standard & Poor's assigned a B rating to Banco Votorantim SA's $50 million 3.375% notes due Aug. 4, 2004. The bank's foreign currency credit ratings are B+ with a stable outlook.

S&P said Banco Votorantim's ratings benefit from the implicit support of the Votorantim Group; the group's strong brand-name recognition; the bank's experienced management team; and efficient decision-making processes.

The ratings also consider the potential risks associated with the bank's treasury business, with its considerable exposure to sovereign risk through its securities portfolio, a common issue for Brazilian banks; a relatively short operating track record on its consumer finance business; and the risks related to the economic environment in Brazil.

Fitch upgrades Pioneer

Fitch Ratings upgraded Pioneer Natural Resources including raising its senior unsecured debt to BB+ from BB. The outlook remains positive reflecting potential for another upgrade over the course of the next six to 18 months.

Fitch said the upgrade is a result of Pioneer's achievement of higher production levels and generation of increased cash flow over the last several quarters.

In the quarter just ended, the company reported production volumes were up some 24% sequentially over the first quarter's levels, Fitch noted. Compared to last year's second quarter, volumes are up 45%. The increased production is being primarily driven by two projects in the Gulf of Mexico, namely the Canyon Express and Falcon projects. Additionally, Pioneer's volumes are expected to increase going forward as three more projects are expected to commence production in the near-to-intermediate term.

Going forward, the increase in production should allow Pioneer to reduce its debt load, Fitch said. For the remainder of 2003, Fitch expects that Pioneer will reduce debt by $100 million. The anticipated increase of production levels in 2004 should also enable the company to be free cash flow positive and pay down additional debt. This should be the case even in a lower or 'mid-cycle' hydrocarbon price environment.

In such an environment in 2004 ($21/bbl. (WTI) & $3.50/Mcf (Henry Hub)), Fitch believes that Pioneer should achieve robust credit metrics. Interest coverage, as measured by EBITDAX/interest, should be above 5 times (x) and debt/EBITDAX should be approximately 2.5x.

Moody's rates Trans-Elect NTD bonds Ba1, Ba3

Moody's Investors Service assigned a Ba1 rating to Trans-Elect NTD Path 15, LLC's $95 million senior secured bonds due 2028 and a Ba3 rating to Trans-Elect NTD Holdings Path 15, LLC's $56 million senior secured bonds due 2023. The outlook for both is stable.

Trans-Elect NTD Path 15's ratings reflect the underlying credit quality of the public utility companies, ranging from A2 for San Diego Gas & Electric Co. to Caa2 for Pacific Gas & Electric Co., which require use of the transmission facilities to distribute energy to their end use customers, Moody's view of the fundamental credit position of the California Independent System Operator, rated Baa2, and the opinion that the CA ISO's rating could potentially cap the ratings of any transmission owner not only because of CA ISO's dual role both as the agent for collections from market participants and payments to the transmission operators and as operator of the transmission grid but also because of the influence of the underlying ratings of the California utilities on CA ISO's rating. Also affecting the ratings are the uncertain nature of the power markets in California and its unsettled political environment, the potential for changes to the Federal Energy Regulatory Commission (FERC) tariff philosophy after the initial rate moratorium period ends and the resulting impact on financial performance, the construction risks associated with the project and the concern for unanticipated delays, and the non-traditional security reflective of the Transmission System Rights (TSR) arrangement required by the disassociation of ownership position and funding sources among the partners.

Trans-Elect NTD Path 15 Holdings' rating reflects the structural subordination associated with holding company debt, the use of debt at the holding company level with the resulting impact on capital structure leverage, and the role of the equity sponsors principally as investors.

Also factored into the ratings are the project's important role in alleviating the congestion issue that currently exists between the load centers in northern California and the generation facilities located in the southern part of the state, the role of transmission facilities in fulfilling an essential public service in the delivery of energy and the monopoly, low-risk nature of that business, the transparency afforded by FERC regulation and a reasonable rate of return, the involvement of the Western Area Power Administration (WAPA), a power marketing administration within the Department of Energy, in the project, and the expectation of satisfactory financial performance of the project, once operational, as measured by projected debt service coverage ratios.

S&P cuts Buckeye Technologies

Standard & Poor's downgraded Buckeye Technologies Inc. including cutting its $100 million 9.25% senior subordinated notes due 2008, $150 million 8% senior subordinated notes due 2010 and $150 million 8.5% senior subordinated notes due 2005 to B from B+. The outlook is stable.

S&P said the action reflects expectations that Buckeye's high debt burden will prevent credit measures from recovering to levels necessary to maintain the former ratings within the next two years.

Substantial debt-financed acquisitions and capacity expansion projects several years ago have not yet yielded a sufficient boost in earnings and cash flows to reduce debt and return credit measures to appropriate levels, S&P said. Although some progress has been made, the pace has also been slowed by sluggish economic conditions and low pulp prices.

The ratings reflect Buckeye's leading shares in value-added product markets and good geographic diversity, offset by excess industry capacity, a meaningful proportion of cyclical commodity sales, and its aggressive debt leverage.

Operating margins (before depreciation and amortization) are slowly recovering as a result of cost reductions, S&P noted. However, they remain impaired by still-weak, though improving, fluff pulp prices and lower cotton cellulose volumes stemming from raw material shortages in fiscal 2002. In addition, Buckeye has yet to reap commercial benefits from substantial investments in new products.

Buckeye has upgraded and expanded its operations primarily through debt-financed capital investment and acquisitions over the past few years and as a result remains highly leveraged, S&P noted. The company's reported total debt of $664 million at June 30, 2003 ($605 million net of cash), represented a modest decline of $37 million during this last difficult fiscal year. Although credit measures are gradually strengthening, progress has been slower than expected because of weak economic conditions in the U.S. and Europe. Debt to EBITDA has declined to 6.8x at June 30, 2003, from its peak of 7.9x a year ago, and should strengthen to below 4x over the next two years as markets recover, cotton cellulose volumes increase and new capacity is absorbed.

Moody's rates Glimcher preferreds Ba3

Moody's Investors Service assigned a Ba3 rating to Glimcher Realty Trust's planned series F cumulative redeemable preferred shares and confirmed its outstanding series B preferred stock.

The outlook remains stable, based upon Glimcher's successful repositioning of the REIT, a continued rise in financial coverages, and the expectation that Glimcher will complete the refinancing of its upcoming debt maturities in 2004.

Also incorporated in the ratings is the REIT's proven track record in developing, acquiring and operating diverse retail properties and its value-added portfolio growth strategy.

Moody's said Glimcher has made significant progress in simplifying its capital structure by buying in joint venture interests and implementing a disciplined growth strategy, while repositioning its portfolio from a predominantly community shopping center company towards regional malls, which now constitute 79% of GLA and 87% of the annualized minimum rents. The performance of Glimcher's portfolio of community shopping centers continues to be crimped by Kmart and Ames closings, as evidenced by the occupancy rate of the community center portion of the REIT's portfolio, which has declined to 76.6% at June 30, 2003, from 87.0% at June 30, 2002.

S&P rates PGN notes B-

Standard & Poor's assigned a B- rating to the $200 million notes due 2013 to be issued by PGN Euro Finance 2003 Ltd., a wholly owned subsidiary of PT Perusahaan Gas Negara (Persero). The outlook is stable.

S&P said PGN's ratings reflect material country risks; an uncertain regulatory environment; high concentration of industrial customers, whose demand tends to be highly correlated with economic activity; uncertain gas demand profile; mismatch of length of gas supply and purchase contracts; and exposure to interest rate and currency movements.

These negatives are partly offset by a strong market position in gas distribution and transmission; insulation from price risk and minimal volume risk from gas transmission business; and moderate cash flow coverage, S&P added. PGN has a strong liquidity position, despite not having access to an unrestricted bank facility. It has $20.5 million debt due in the next 12 months and had more than $38 million in cash and equivalents as at March 31, 2003.

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