S&P upgrades Iasis

Standard & Poor's upgraded Iasis Healthcare Corp. including raising its $100 million 8.5% senior subordinated notes due 2009 and $230 million 13% senior subordinated notes due 2009 to B- from CCC+ and $125 million revolving credit facility due 2008 and $350 million term B loan due 2009 to B+ from B. The outlook is stable.

S&P said it upgraded Iasis because of its increased confidence that the company will be able to sustain its recently improved credit profile at a level that is consistent with the higher rating.

Iasis' ratings reflect the competitive nature of the company's key markets and the industry challenges it faces, including increasing insurance expenses and reimbursement risk, S&P added.

Nevertheless, IASIS remains challenged to extend its recent successes, as the environment for hospitals will remain pressured. Although Medicare reimbursement for the next year appears not to be a concern, the future of government reimbursement remains a risk, particularly Medicaid reimbursement, S&P said. Currently favorable managed care reimbursement trends are likely to moderate during the next year or two. Expected ongoing increases in key expense categories such as labor and insurance will also continue to pressure profitability.

S&P cuts some United aircraft debt

Standard & Poor's downgraded some selected equipment trust certificates and enhanced equipment trust certificates of United Air Lines Inc. All obligations still paying remain on CreditWatch negative.

Ratings downgraded are equipment trust certificates series 1997-1, class A to B from BB-, series 2000-1, class B to CCC from B-, series 2000-2, class B to CCC+ from B, series 2000-2, class C to CCC from CCC+, series 2001-1, class B to B+ from BB, series 2001-1, class C to CCC+ from B-, Jet Equipment Trust series 1994A, class A to CCC- from CCC+, Jet Equipment Trust series 1994A, class B-1 to CC from CCC-, Jet Equipment Trust series 1995A, class A to CCC+ from B-, Jet Equipment Trust series 1995A, class B to CC from CCC, Jet Equipment Trust series 1995A, class C to CC from CCC-, Jet Equipment Trust series 1995B, class A to CCC from CCC+, Jet Equipment Trust series 1995B, class B to CC from CCC and Jet Equipment Trust series 1995B, class C to CC from CCC-.

S&P cut to D equipment trust certificates series 1991A2, previously at CCC-, series 1991B, previously at CCC-, series 1991C, previously at CCC, series 1991D, previously at CCC, series 1991E, previously at CCC, series 1992A1, A2, previously at CCC, series 1992B1, B2, previously at CCC-, series 1993A4, previously at CC, series 1993B, previously at CCC, series 1993C, previously at CCC, series 1995A, previously at CCC, series 1996A1, A2, previously at CC, series 2001-1, class D, previously at CCC, Jet Equipment Trust series 1995B, class D, previously at CC.

S&P confirmed and kept on watch series 2000-1, class A-1 at BBB-, series 2000-1, class A-2 at BBB-, series 2000-2, class A-1 at BBB-, series 2000-2, class A-2 at BBB-, series 2001-1, class A-1 at BBB-, series 2001-1, class A-2 at BBB-, series 2001-1, class A-3 at BBB-, Jet Equipment Trust series 1994A, class B2 at CC and Jet Equipment Trust series 1995A, class D at CC.

United Air Lines Inc. and UAL Corp.'s corporate credit ratings remain at D.

S&P said the downgrades are are based on reduced collateral coverage, changes in the perceived likelihood of full and timely repayment as United continues in negotiations with creditors, or on actual payment defaults, depending on the particular debt instruments involved.

The downgrades to D of ETCs and junior classes of EETCs that do not have a liquidity facility reflect defaults that have occurred as payments have come due since United's bankruptcy filing on Dec. 9, 2002, S&P noted. In some cases, United has made partial payment under interim agreements with creditors, but not full, timely payment.

The downgrades of classes of EETCs reflect perceived greater risk of default, based on ongoing deterioration in aircraft values and the status of United's negotiations with holders of aircraft-backed debt.

Prospects for full repayment vary significantly from case to case. The Jet Equipment Trust Series EETCs, issued in the mid-1990s and backed by older Boeing planes, all have weak collateral coverage; indeed almost all are undercollateralized. Although United may well continue to operate many of these planes, existing financings are likely to be significantly renegotiated, with prospects for full repayment ranging from uncertain to virtually nil, S&P said.

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