S&P confirms AES ratings

Standard & Poor's confirmed the BB ratings on AES Corp.'s $1.62 billion senior secured bank facility and $350 million senior secured exchange notes.

S&P views the default risk of the bank facility and exchange notes as equal to the B+ corporate credit rating of AES, but the two-notch elevation of the ratings on these instruments reflects a high degree of confidence that the collateral package provides enough value for secured lenders to realize 100% recovery in a default or stress scenario.

Moody's ups Sanmina-SCI

Moody's Investors Service raised to SGL-1 from SGL-2 the speculative-grade liquidity rating for Sanmina-SCI Corp., based on its $1.5 billion cash balance at Sept. 28 and enhanced visibility into its pipeline of new customer programs.

The balance sheet cash, which takes into account the December 2002 senior secured tranche B term loan and second lien senior secured notes financing, along with higher confidence regarding anticipated cash flow from operations suggest there is sufficient liquidity to comfortably finance operations for at least the next 12-18 months.

S&P confirms Vivendi

Standard & Poor's confirmed Vivendi Universal SA and removed it from CreditWatch with developing implications. The outlook is stable. Ratings affected include Vivendi's bonds and convertibles at B+, Joseph E. Seagram & Sons Inc.'s senior notes, debentures, bonds, QUIDS and ACES at B+

S&P said the confirmation reflects Vivendi's significantly improved liquidity position following the successful completion of a string of asset disposals and financing agreements, in particular its sale of Houghton Mifflin for $1.28 billion (around €1.3 billion) in cash and $380 million of assumed debt.

Vivendi's ratings and outlook primarily reflect the recent substantial improvement in the company's liquidity and its reduced debt burden.

However, Vivendi's liquidity would again come under strain if none of the major asset disposals it has planned for 2003 materialize, as well as if the full refinancing of U.S. subsidiary Vivendi Universal Entertainment's $1.62 billion credit line maturing mid-2003 proves difficult, S&P cautioned.

Apart from Vivendi Universal Entertainment, the group's existing cash balances and available credit lines should be sufficient to cover debt obligations and other commitments through 2003, without any access to new financing, S&P added.

Nevertheless, the rating agency said it expects Vivendi to actively seek further asset-disposal opportunities in 2003, in order to maintain adequate liquidity, gradually improve cash flow generation at its entertainment divisions, and reduce debt to levels consistent with the group's business profile and ratings.

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