S&P puts Kamps on positive watch

Standard & Poor's put Kamps AG on CreditWatch with positive implications.

Ratings affected include Kamps' €660 million LYONs due 2015, €250 million 8% notes due 2005 and €325 million 8.5% notes due 2009, all rated BB, and its €400 million revolving credit facility due 2007 rated BB+.

Moody's downgrades Genuity's loan to Ba1

Moody's Investors Service on Monday downgraded Genuity Inc.'s senior unsecured credit rating and its $2 billion revolving credit facility due September 2005 to Ba1 from Baa2. The ratings remain under review for further downgrade.

"The downgrade reflects Moody's concerns that the probability of the reintegration of Genuity's operations with those of Verizon Communications (rated A1, negative outlook) has been reduced" due to Genuity's poor financial performance, the Moody's release said. "Genuity's Ba1 rating remains substantially higher than what its pure stand-alone rating would be, suggesting a still material probability of reconsolidation with Verizon," the release added.

Genuity's revenues fell below expectations because of a reduction in IT spending and order rates, causing the company to reduce its growth prospects. The review for downgrade will focus more on the company's stand-alone performance since Verizon has been distancing itself.

As of 2001 year-end, Genuity had over $950 million in cash on its balance sheet, $850 million available under a $2 billion Verizon facility and $850 million available under a $2 billion revolver. Both loans mature in 2005 and the company is anticipated to comfortably satisfy all financial covenants.

S&P upgrades Oxford Health

Standard & Poor's upgraded Oxford Health Plans Inc. to BB+ from BB-.

S&P said it made the change because of the company's sustained earnings and cash flow strength, improved balance-sheet quality, and good risk-adjusted capitalization.

"Oxford's strengthened margins derive mostly from a combination of a disciplined underwriting approach and proactive management of the underlying drivers of medical cost," S&P said.

Pretax income was $512 million for the year ended Dec. 31, 2001, compared with $485 million for the prior year. Consolidated operating cash flow for 2002 is expected to be substantially lower than the $614 million generated in 2001 as 2001 operating cash flow benefited from the use of net operating loss carryforwards, the timing of certain operating cash receipts, and other one-time events.

S&P takes Varsity Brands off watch

Standard & Poor's confirmed Varsity Brands Inc. and took the company off CreditWatch with negative implications. The outlook is stable. Ratings affected include Varsity Brands' $115 million 10.5% senior notes due 2007 rated B- and $35 million revolving credit facility due 2002 at B+.

S&P said the action reflects Varsity's adequate liquidity and fairly stable, though modest, cash flow following the sale of the Riddell Group Division.

With the sale of the Riddell Group and litigation related to Umbro Worldwide resolved, management can focus on its core cheerleading business that is exhibiting decent growth, S&P added.

Pro forma for the sale of the Riddell Group, total debt outstanding was approximately $81.8 million on Dec. 31, 2001.

Pro forma EBITDA was about $18 million in 2001, and EBITDA coverage of interest expense was about 1.6 times, S&P continued.

S&P lowers Exide Technologies to D

Standard & Poor's downgraded Exide Technologies' corporate credit rating to D from CC following news of the company's filing for Chapter 11. Concurrently, the rating was removed from CreditWatch and the CC senior unsecured debt rating on Exide Holding Europe SA was affirmed and removed from CreditWatch. Exide's existing bank debt, senior notes and convertibles were cut to D from CC.

The company has arranged for $415 million in new financing, including $250 million debtor-in-possession financing. According to S&P, Exide Technologies currently has about $1.4 billion in outstanding debt.

Moody's upgrades Oxford Health

Moody's Investors Service upgrades Oxford Health Plans' senior implied rating to Ba2 from Ba3. The outlook is stable.

Moody's said it raised Oxford Health because of improvements in dividend capability as well as adequate capital cushions at the regulated subsidiary level.

Further upward rating action is possible once greater clarity is achieved on Oxford's outstanding shareholder litigation, and as management demonstrates that future growth will be financed prudently, Moody's added.

Moody's downgrades Bear Island

Moody's Investors Service downgraded Bear Island Paper Co., LLC and assigned a negative outlook. Ratings affected include Bear Island's $25 million senior secured revolving credit facility due 2003 and $17 million senior secured term loan due 2005, both cut to B3 from B1, and its $100 million senior secured notes due 2007, cut to Caa2 from B3.

Moody's said it cut Bear Island because of continuing losses, weak prices of newsprint, the company's weak liquidity, non-compliance with the financial covenants of its credit agreement and the ability of its lenders to accelerate the debt.

The downgrade further incorporates uncertainty about the degree of future support that the lenders will provide to the company and the lack of indication of whether the shareholders will provide additional capital.

Moody's noted that Bear Island is a small company with one newsprint mill and is dependent upon a few customers with five clients making up 70% of 2001 sales. It also competes with companies that have significantly greater resources in the highly cyclical newsprint market that is commodity in nature.

S&P puts AMI on watch

Standard & Poor's put AMI Semiconductor Inc. on CreditWatch with negative implications.

Ratings affected include AMI's $175 million term loan due 2006 and $75 million revolving credit facility due 2006, both rated BB-.

S&P puts MTS on developing watch

Standard & Poor's put MTS Inc. on CreditWatch with developing implications. Previously it had a negative outlook on the company.

Ratings affected include MTS' $100 million 9.375% senior subordinated notes due 2005 rated CC and its $225 million revolving credit facility due 2002 rated CCC.

Moody's rates XTO notes Ba2

Moody's Investors Service assigned a Ba2 rating to XTO Energy's proposed $300 million of 10-year senior unsecured notes and confirmed the company's existing ratings including theBa3 senior subordinated and Ba1 senior implied. The outlook is stable.

Moody's said the notes are rated are one notch below the senior implied rating due to effective subordination to pro-forma $532 million of secured debt.

The ratings benefit from XTO's very strong hedge position, visible production and reserve gains within acceptable expected debt levels, high level of basin geologic knowledge in core areas, a diversified base, 8.6 year reserve life on proven developed reserves, high 94% of XTO-operated properties, and sound record of building scale and diversification at competitive full-cycle costs and cash-on-cash returns, Moody's said.

Moody's added that it does not expect XTO to be upgraded soon, absent a very large quality acquisition funded heavily with equity or, less likely, more diversified organic production growth from properties delivering new wellbores with longer volumetric half-lives than its dominant core East Texas properties which account for 44% of production.

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