Moody's downgrades Nextel Intl debt to Ca from Caa1

Moody's Investors Service downgraded the senior unsecured debt of Nextel International, Inc. to Ca from Caa1, affecting $2.3 billion face value of debt. Debt issues affected are Nextel International's 12.75% senior notes due 2010, its 13% senior discount notes due 2007 and its 12.125% senior discount notes due 2008.

Moody's said it believes a restructuring of the company's debt is "highly likely."

It added that Nextel International will likely be unable to generate enough cash to service its debt nor does it believe the company will be able to attract additional capital, "given the current operating environment in its Latin American markets and the state of the capital markets."

Moody's noted it is unclear whether Nextel Communications, Inc. retired $857 million (face value) of

notes exchanged in August for 21.6 million shares Nextel Communications common stock.

Including those notes, Moody's said Nextel International faces cash interest expense in 2002 of $150 million and $160 million of principal repayments on bank debt. On top of that it still faces large capital expenditure requirements in its markets and is not yet EBITDA positive.

The Ca rating on the notes reflects Moody's belief that there will be "some modest recovery" to bondholders due to the relationship between Nextel International and its parent Nextel Communications, as well as the relationship between both companies and Motorola, Nextel International's largest creditor. Nextel International also owns towers in its markets and shares in Telus Corp. that could be monetized.

Moody's rates new Adelphia notes B2, puts all ratings on review for downgrade

Moody's Investors Service rated Adelphia Communications Corp.'s new $500 million of 10¼% senior unsecured notes due 2006 at B2 but put all ratings of Adelphia and its subsidiaries on review for possible downgrade, affecting $20 billion of debt and preferred securities.

Ratings affected include: Adelphia's senior secured bank debt, rated Ba3, its senior unsecured notes, rated B2, its convertible subordinated notes, rated B3, and its convertible and exchangeable preferred stock, rated Caa1.

Moody's said its review will mainly be an independent assessment of management's ability to:

--Complete now-delayed sales of previously identified non-core assets in the near term and at valuations in accordance with prior expectations;

--Off-load the still lingering overhang and uncertainty associated with its majority-owned competitive local exchange carrier Adelphia Business Solutions (its ratings are not affected by this action);

--Mitigate the risks of further margin erosion, slower cash flow growth and a correspondingly reduced ability to delever given Moody's expectations of a more prolonged economic slowdown than previously anticipated, in conjunction with the expected maturing of overall subscription pay television services more broadly;

--Satisfaction of the company's intermediate-term liquidity needs.

Moody's rated InSight Health upcoming notes B3

Moody's Investors Service rated the upcoming offering of $200 million senior subordinated notes by InSight Health Services Corp. at B3 and the company's new $275 million senior secured credit facilities B1. Existing ratings will be withdrawn in connection with the financing. The outlook is stable.

Proceeds from the notes and credit facilities will be used to help refinance existing debt and purchase the outstanding shares of InSight as part of the company's acquisition by an affiliate of J.W. Childs Associates, LP and The Halifax Group, LLC.

Moody's said its ratings reflect the company's "high leverage and low coverage, its modest anticipated cash flow, the significant capital requirements of the business, a declining trend in average price per scan and competition in the industry."

However they are also helped by InSight's strong market position, successful business model, anticipated improvements in operating metrics and favorable demographic as well as industry trends, the rating agency said. It also noted InSight has an experienced management team with demonstrated ability to operate under a leveraged environment.

Moody's downgrades Packaged Ice senior notes to Caa3 from B3

Moody's Investors Service downgraded Packaged Ice, Inc.'s $270 million of 9¾% senior notes due 2005 to Caa3 from B3. The outlook is negative.

Concluding a review begun in May 2001, Moody's said the downgrades reflect the company's "impaired financial condition and poor liquidity primarily resulting from soft demand for product and services combined with the company's high cost structure."

It added: "Historically aggressive, debt funded capital expenditures have not yielded adequate returns."

Packaged Ice's ability to ride out the unpredictable impact of weather is weak, given its "soft" financial results so far and resulting lack of financial flexibility, the rating agency said.

While management has a plan to restructure operations and address cash flow, Moody's said it believes there is only limited time to execute a turnaround strategy or liquidate non-core assets to generate cash.

Moody's reviewing Dana's long term debt for possible downgrade

Moody's placed the long-term debt ratings of Dana Corp. under review for possible downgrade and placed both the long-term and short-term debt ratings of Dana Commercial Credit under review with direction uncertain.

The action was taken, Moody's stated, "following the company's announcement that it will be taking further restructuring actions in light of its exceptionally weak end markets, which are now expected to last well into 2002."

The company anticipates a $400-$450 million after-tax restructuring charge, most of which will occur in the fourth quarter of 2001, the rating agency said.

The ratings under review for possible downgrade include Dana's Ba1 long-term debt ratings for notes and industrial revenue bonds. The ratings under review with direction uncertain are Dana Credit's Ba1 long-term debt rating for MTNs; and the Not Prime short-term debt rating.

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