Fitch ups Northrop outlook to positive

Fitch Ratings confirmed the BBB- ratings on Northrop Grumman Corp.'s senior unsecured debt and bank facilities, the BBB- rating on Litton Industries' senior unsecured debt, the BB rating on Northrop's convertible preferreds and assigned a BBB- rating to the debt of Northrop Grumman Space & Mission Systems Corp. formerly TRW Inc., plus revised the outlook to positive from stable.

The outlook reflects improving credit statistics, which are the result of significant debt reduction of 26% at March 31 compared to year-end 2002, and expected revenue growth, Fitch said.

Several rating concerns have been resolved since the beginning of 2003, including the sale of TRW Automotive, the amount and timing of debt reduction, the B-2 tax payment and CEO succession.

Liquidity at March 31 was $1.9 billion, consisting of $408 million of cash, $1.8 billion of availability under the $2.5 billion credit facility, offset by $276 million of short-term debt and current maturities.

Debt-to-EBITDAP ratio for the last 12 months ended March 31 was 3.6x, down from 5.6x at the end of 2002. Interest coverage for the period was 4.3x, steady with the 2002 level.

Fitch expects Northrop to reduce bank debt balances by the end of the year, driving further improvement in these credit statistics.

Moody's puts Wells Fargo on upgrade review

Moody's Investors Service placed on review for possible upgrade the long-term credit ratings of Wells Fargo & Company (senior debt at Aa2) and its subsidiaries (deposits at Aa1). Short-term ratings were confirmed.

The review reflects a strong retail and middle-market banking franchise as well as robust core earnings, solid risk management and highly focused sales culture. Moody's believes that these factors should lead to the continuation of a stable and predictable earnings and risk profile.

Moody's said Wells Fargo's performance is consistently strong in comparison to peers, characterized by a wide net interest margin, strong pre-provision earnings and consistent core deposit growth.

In addition, the bank's highly granular credit exposures and solid risk management limit the volatility of its credit costs.

S&P puts ResMed on positive watch

Standard & Poor's placed the ratings of ResMed Inc., including the convertibles at B-, on positive watch, reflecting the possibility of sustaining a stronger financial position because of strong cash flows, which have resulted in substantial debt reduction.

While development of untapped markets offers significant business potential, ResMed faces the challenge of boosting physician and consumer awareness of the need for sleep disorder treatment. Moreover, ResMed faces competition from larger companies with greater financial capabilities.

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