S&P rates Safilo notes B

Standard & Poor's assigned a BB- rating to Safilo SpA's new €430 million bank loan due 2011 and a B rating to Safilo Capital International SA's €225 million subordinated bonds due 2013. The outlook is stable.

S&P said the ratings reflect Safilo's highly leveraged financial profile, resulting from the company's delisting in 2002 and the subsequent buyout of minority interests, which resulted in total debt of €900 million at year-end 2002.

Net debt to EBITDA - including securitization - should range between 4.5x and 4.8x at year-end 2003, and EBITDA coverage of cash interest should not significantly exceed 2.5x, S&P noted.

Although these weak credit measures are mitigated by Safilo's very solid market position in the fast-growing premium eyewear segment, an excellent operating track record, and the likely credit benefits from the recently awarded Armani license, S&P said it believes that the group's deleveraging plan to achieve a net debt-to-EBITDA ratio of 2.5x by year-end 2005 - based on substantially higher free cash flow generation - could be challenged by overall market conditions, (including the US$/€ exchange rate), the loss of a major license, or substantial working-capital needs.

S&P rates Unibanco notes B+

Standard & Poor's assigned a B+ rating to Unibanco- União de Bancos Brasileiros, SA's new $75 million 5.625% euro bonds due 2004. The outlook is stable.

S&P said Unibanco's ratings reflect the bank's solid franchise in Brazil, its diversified business profile, high-quality management, strong earnings power, and overall strategy in line with the competitive Brazilian market.

Balancing these aspects are Unibanco's low although improving operating efficiency compared with that of its Latin American peers, a track record of substantial charge-offs, and exposure to Brazil's volatile environment and sovereign risk, S&P said.

Unibanco's stable outlook mirrors that of the foreign currency ratings assigned to Brazil.

Moody's cuts NUI

Moody's Investors Service downgraded NUI Utilities, Inc. including its senior unsecured debt to Ba1 from Baa3 and its parent NUI Corp. including its senior unsecured debt to B1 from Ba2. The outlooks on both companies are negative. The action concludes a review for downgrade on both companies.

Moody's said the B1 rating more properly reflects the reduced financial flexibility at NUI Corp. due to under-performance at some of its unregulated businesses, as well as the effective subordination of NUI Corp.'s debtholders to those of NUI Utilities.

NUI Corp.'s debtholders rely primarily on the dividends being upstreamed by its operating subsidiaries, of which NUI Utilities represents the largest and most stable share.

Moody's noted that management has taken the positive step of identifying certain underperforming businesses that it would like to sell such as NUI Environmental and NUI Energy. While these transactions could take some time to be effected, they could result in significant cash being returned to the company that will help to stabilize its credit profile.

Moody's said its action on NUI Utilities reflects the continued reliance of NUI Corp. on the utilities' operating cash flows in order to support its operating needs and debt service requirements as it evaluates its long-term strategy regarding its non-regulated businesses.

Fitch cuts Aeromexico

Fitch Ratings downgraded Aerovias de Mexico, SA de CV's senior unsecured debt to B+ from BB and removed it from Rating Watch Negative. The outlook is stable.

Fitch said the action reflects continued weak profitability for Aeromexico and incorporates expectations of a further decline in profitability during early 2003.

Aeromexico has faced weak passenger demand in both its domestic routes, which account for close to 70% of revenues, and international routes, which account for the remaining 30%.

As a result, the company was slightly under EBITDA breakeven levels during 2002, with EBITDAR/interest expense + rents at 0.9x.

Cash flow generation has been further pressured by the combination of lower passenger traffic on routes to the United States and a spike in fuel prices due to the conflict between the United States and Iraq, Fitch said. Aeromexico's cash flow generation could gradually improve in the second half of 2003 as the end of the conflict may result in a recovery in passenger traffic on routes to the United States and lower fuel prices. Nevertheless, EBITDAR/interest expense + rents is expected to remain below 1.0x during 2003.

Moody's puts Aviation Capital on review

Moody's Investors Service put the four classes of notes issued by Aviation Capital Group Trust Series 2000-1 on review for downgrade including its $364.1 million class A-1 floating rate notes due 2025 at Aa2, $71.3 million class B-1 floating rate notes due 2025 at A2, $75.1 million class C-1 floating rate notes due 2025 at Baa2 and $26.3 million class D-1 fixed rate notes due 2025 at B1.

Moody's said Aviation Capital Group has been experiencing reduced cash flows due to lease restructurings, and extensions and renewals with lower lease rates.

Moody's said its review will look at the potential lease revenues that might be generated on the aircraft that are currently off-lease or that will be coming off-lease within the next 12 months; the impact of delinquent lease payments on revenues; current and future expenses relating to repossession, remarketing, and maintenance of aircraft from current lessees; the marketability of mid-life and old technology aircraft in the current environment; and the impact of SARS on the Asian market.

Moody's puts Aircraft Finance on review

Moody's Investors Service put the five classes of notes issued by Aircraft Finance Trust on review for possible downgrade including its $512 million class A-1 floating rate asset-backed notes series 1999-1 due 2024 at Aa2, $252.3 million class A-2 floating rate asset-backed notes series 1999-1 due 2024 at Aa2, $115.9 million class B floating rate notes series 1999-1 due 2024 at A2, $86.7 million class C fixed rate notes series 1999-1 due 2024 at Ba1 and $61 million class D fixed rate notes series 1999-1 due 2024 at B2.

Moody's said Aircraft Finance Trust has been experiencing reduced cash flows due to lessee defaults, lease restructurings, and extensions and renewals with lower lease rates.

Moody's said its review will focus on the potential lease revenues that might be generated on the aircraft that are currently off-lease or that will be coming off-lease within the next 12 months; the impact of delinquent lease payments on revenues; current and future expenses relating to repossession, remarketing, and maintenance of aircraft from current lessees; the marketability of mid-life and old technology aircraft in the current environment; and the impact of SARS on the Asian market.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.