Moody's raises Waste Management to high grade

Moody's Investors Service upgraded Waste Management, Inc. to investment grade affecting $7.8 billion of debt including its credit facility and notes, raised to Baa3 from Ba1, and convertible subordinated notes, raised to Ba1 from Ba2. The speculative-grade liquidity rating was raised to SGL-1 from SGL-2 and withdrawn. The action concludes a review for upgrade. The outlook is stable.

Moody's said the upgrade reflects the strength of Waste Management's cash generation despite the weak economic environment; improvement in the company's liquidity profile in light of a relaxation of the leverage covenant under its bank agreement; and prudent treasury policy as evidenced by the management of its large share repurchase program.

The waste services industry continues to be impacted by a sluggish economy and higher fuel and insurance costs which contributed to Waste Management's slightly eroded profitability margins in the fourth quarter of 2002 and increased leverage.

However, the combination of the company's cash generative ability, its fiscal policy, liquidity profile and anticipated cost management suggests that any further weakness related to macroeconomic influences would be insufficient to cause a negative movement in the rating, Moody's said.

S&P says Sinclair unchanged

Standard & Poor's said Sinclair Broadcast Group Inc.'s ratings are unchanged including its corporate credit at BB- with a negative outlook following the company's downwardly revised expectations for revenue growth in the 2003 first quarter.

Financial performance towards the end of the quarter was disrupted by the onset of war in Iraq, which resulted in advertiser cancellations and preemptions, primarily from the auto sector, S&P noted. Minimal revenue growth and modest declines in broadcast cash flow had been expected in 2003 due to the soft economy; escalating geopolitical tensions; lack of political spending that makes TV operators more dependent on general advertising; capital needs related to digital television operations; and increased promotion, programming, and news expenses.

Still, Sinclair is expected to generate positive discretionary cash flow this year, S&P said. There is a modest cushion in the rating for weak revenue performance, eroding covenant cushion, or deteriorating credit ratios due to either depressed advertising trends or debt-financed acquisitions.

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