S&P cuts Adelphia

Standard & Poor's lowered Adelphia Communications Corp.'s corporate credit rating to D from CCC-. S&P said the downgrade follows Adelphia's missed interest payment on its $500 million 9.375% senior unsecured note issue. The rating on that issue was also lowered to D from CC. Other Adelphia bond issues were lowered to C from CC and remain on CreditWatch with negative implications; its bank loans were left unchanged at CCC and remain on CreditWatch with negative implications.

S&P said it expects Adelphia will miss payments on other unsecured, subordinated and preferred stock issues.

It added that it kept the secured bank loan ratings unchanged because it believes that given the value of the cable television properties in the respective bank credit agreements these creditors have reasonable prospects to ultimately receive full repayment in a liquidation scenario.

S&P rates Trico notes B

Standard & Poor's assigned a B rating to Trico Marine Services Inc.'s planned offering of $250 million senior unsecured notes. The transaction refinances Trico's outstanding $248 million senior unsecured notes issue and extends its maturity schedule.

S&P said Trico Marine's ratings reflect its participation in the volatile offshore support segment of the petroleum industry and aggressive financial leverage.

Roughly half of the company's revenues are derived from the Gulf of Mexico, a market that typically operates on short-term contracts, S&P noted. The recent weakness of the Gulf of Mexico market has been tempered by the company's exposure to the relatively stable international markets.

Cash flow stability is underpinned by the contract position of the company's international fleet; a high percentage of the company's 2002 projected revenue is under contract, S&P said.

In the near term, Trico's financial profile will reflect both the difficulties in the Gulf market and the effects of its newbuild program, S&P said. Total debt to capital is expected to remain in the 50% to 55% range, however debt to EBITDA likely will exceed 6.0 times. Leverage is expected to decrease with the recovery of the Gulf of Mexico market and the contribution of the newly constructed vessels in the following year.

Fixed charge coverage measures are weak for the rating, with EBITDA to interest plus capital expenditures below 1.0 time likely in 2002, S&P added.

Moody's rates H&E Equipment's loan B2; notes B3

Moody's Investors Service assigned a B2 rating to H&E Equipment Services LLC's proposed $125 million senior secured revolver due 2007 and a B3 rating to the proposed $275 million senior secured notes due 2012. In addition, the company was assigned a senior implied rating of B3 and a senior unsecured issuer rating of Caa2. The ratings have a stable outlook.

The revolver will be secured by a first-priority lien on assets and company stocks. The notes will be secured by a second-priority lien on the same assets. Both the loan and the notes will be used to fund the formation of the company through the combination of Head and Engquist Equipment, LLC and ICM Equipment Company LLC.

"The ratings reflect the Company's high debt leverage, thin interest and fixed charges coverage, low profit margins, negative-to-marginal free cash flow generation, low equipment utilization rate, heavy reliance on a limited number of equipment suppliers, exposure to business and capital spending cycles in the construction and manufacturing industries, intense competition in the equipment rental industry, and significant integration challenges," Moody's said. "On the other hand, the ratings also reflect the company's strong equipment service and support capacity, profitable parts and service operations, younger-than-average fleet, good asset coverage, and established channels of disposing of used equipment."

The stable outlook reflects improvement in funding and maturity profile following the refinancing.

After the transaction, pro forma debt will be about $337 million and total debt leverage will be about 7.4 times pro forma combined 2001 EBITAR.

S&P rates H&E Equipment loan B+; notes B

Standard & Poor's assigned a B+ rating to H&E Equipment Services LLC's proposed $125 million five-year senior secured revolver and a B rating to the proposed offering of $275 million senior secured notes due 2012. In addition, a corporate credit rating of BB- was assigned to the company.

The bank loan is secured by a fully perfected first priority security interest in all assets.

Ratings reflect the company's market position, geographic location in high growth markets and customer diversity. These positive factors are offset by the company's debt leverage and aggressive financial policy, S&P said.

H&E Equipment is being formed by the combination of two equipment rental companies, Head & Engquist Equipment LLC and ICM Equipment Company LLC. The proposed financing for H&E Equipment will be used in connection with the combination.

H&E's total debt to EBITDA is 3.6 times and EBIDTA to cash interest coverage is 2.7 times on a pro forma basis.

S&P changes Panolam's outlook to stable

Standard & Poor's revised its outlook on Panolam Industries International Inc.'s to stable from positive. In conjunction, all other ratings were confirmed including a corporate credit rating of B+ and a bank loan rating of B+.

"The revision reflects expectations that weak market conditions will prevent the company's credit measures from strengthening in the next one to two years to levels previously anticipated," S&P said. "The ratings reflect the company's market leadership and favorable cost position in niche decorative panels markets. These factors are offset by the cyclicality of end markets, limited product diversity, and a highly leveraged capital structure."

The company's EBIDTA interest coverage is about 2.5 times and debt to EBIDTA is just below 4 times.

S&P upgrades Denbury Resources

Standard & Poor's upgraded Denbury Resources Inc. Ratings affected include Denbury's $200 million 9% senior subordinated notes due 2008, raised to B from B-, its $300 million revolving credit facility due 2002, raised to BB from BB-. The outlook is stable.

S&P said it upgraded Denbury's because the company continues to have leverage that is consistent with the BB rating category, a more disciplined financial philosophy since the severe 1998-99 industry downturn, the expected improvement in the company's financial profile resulting from likely elevated oil prices in 2002, expectations for prudent reinvestment of upcycle cash flows and good production growth during the next two years from Denbury's long lead-time development projects in

Mississippi, which will further enhance the company's debt-service capacity.

The ratings reflect Denbury the company's midsize reserve base, a worse-than-average cost structure and an aggressive growth strategy, S&P added.

Positives include its high percentage of company-operated properties that require modest future development expenses and have a fairly long reserve life, which provides the company with meaningful operational and financial flexibility.

S&P rates Graham Packaging loan B

Standard & Poor's assigned a B rating to Graham Packaging Co.'s $175 million term D loan due 2007.

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