Fitch cuts TXU

Fitch Ratings downgraded TXU Corp. and its subsidiaries. The outlook was revised to stable from negative. Ratings lowered include TXU's senior notes, cut to BBB- from BBB, preference stock, cut to BB+ from BBB-, TXU U.S Holdings' senior unsecured debt cut to BBB- from BBB+ and preferred stock cut to BBB- from BBB+, Oncor Electric Delivery Co.'s first mortgage bonds cut to BBB+ from A- and debentures cut to BBB from BBB+, TXU Energy Co. LLC' senior unsecured bonds cut to BBB from BBB+, TXU Gas Co.'s senior notes cut to BBB- from BBB, TXU Australia Holdings LP's senior unsecured debt cut to BBB- from BBB, TXU Electricity Ltd.'s bonds cut to BBB- from BBB and Pinnacle One Partners, LP's senior secured notes cut to BB+ from BBB-.

Fitch said the downgrade takes into account TXU's already high leverage and the increased debt burden resulting from recent borrowings under new financing arrangements and existing credit facilities to maintain liquidity for potential collateral calls or accelerated repayment of debt associated with Pinnacle One Partners, and the related increase in interest expense.

Fitch said it expects TXU will have to maintain large cash reserves for an extended period as a precaution against potential collateral calls or accelerated maturities, pushing up the cost of capital and potentially delaying a needed reduction in debt leverage.

The stable outlook for TXU and the maintenance of investment-grade ratings recognize the existence of sufficient liquidity to meet expected refinancing and potential collateral requirements, after the painful but necessary decision to terminate support for TXU Europe, resulting in the ailing subsidiary going into administration, Fitch added.

Fitch rates Cendant revolver

Fitch Ratings assigned a BBB+ rating to Cendant Corp.'s new $2.9 billion three-year revolving credit facility.

The new credit facility, which increases liquidity, replaces two revolving credit facilities that had a combined availability of $2.4 billion.

The ratings reflect a leading position and well-known brands, low capital expenditure requirements, diversity and maintenance of adequate liquidity to fund major near term obligations, Fitch said.

S&P rates United Rentals

Standard & Poor's assigned a BB- rating to United Rentals (North America) Inc.'s $200 million additional 10.75% senior unsecured notes due 2008 and confirmed its other ratings, including the 6.5% convertible preferreds at B+. The outlook is stable.

The ratings reflect a position as the largest provider of equipment rentals in the U.S., good diversity, exposure to cyclical construction end markets and a moderately aggressive financial policy.

The company's third-quarter operating income was weaker than expected, causing the company to amend its fixed-charge coverage ratio on its credit facility.

The company had about $24 million in cash on hand at Sept. 30 and will have ample availability under its newly amended $650 million revolving credit facilities. It has the ability to limit its capital expenditures and also sell more used rental equipment to raise cash.

Although construction spending may continue to remain weak over the intermediate term, S&P expects that management will be able to manage capital spending and meet cash flow protection measures.

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