Fitch cuts Sprint senior unsecured to BBB from BBB+

Fitch Ratings downgraded Sprint Corp's senior unsecured rating to BBB from BBB+. Fitch also downgraded Sprint Capital Corp.'s senior unsecured debt and equity unit securities to BBB from BBB+. The F2 commercial paper rating remains unchanged. The Rating Outlook was changed to stable from negative.

Sprint's credit protection measures have been below those required for a BBB+ rating category for a protracted period, Fitch said, adding it has concerns that the company can achieve planned financial improvement in 2002 that would allow for credit metric performance indicative of a BBB+ rating. Fitch is expecting credit protection metrics to be stronger in 2002, but believes that Sprint's current and expected credit profile over the near term is consistent with a BBB rating in the current industry environment. At the new level, Sprint has a greater degree of flexibility with respect to its expected financial performance, therefore, its Rating Outlook is stable.

Debt levels at the company increased rapidly with continued heavy investment in Sprint PCS and ION initiative over the past couple of years. The larger debt levels coupled with adverse economic conditions hurting demand for data services caused credit protection measures in 2001 to fall short of expectations.

Moody's puts Elan on review for possible downgrade

Moody's Investors Service placed the debt ratings of Elan Corp. PLC (Baa2 notes guaranteed on a senior basis), as well as the units Athena Neurosciences and Dura Pharmaceuticals, under review for possible downgrade. The rating action follows the company's fourth quarter earnings announcement and 2002 guidance, and recent questions related to Elan's accounting practices, the decline in Elan's share price and market capitalization, as well as shareholder lawsuits.

Attention on Elan's accounting has focused on revenue recognition and treatment of off-balance-sheet vehicles. Specific questions have concerned Elan's contract revenues from joint ventures, as well as the treatment of product sales to third parties (i.e. product rationalization). The company reported U.S. GAAP operating cash flow of $594 million in 2001, compared to $406 million in 2000. Moody's rating review will consider the extent to which joint ventures and product rationalization may have impacted Elan's earnings and operating cash flow. The review will also consider Elan's free cash flow, which will be reduced in 2002 due to rising capital expenditures, expected to total $200 - $250 million.

Fitch cuts Tyco Capital ratings

Fitch Ratings lowered Tyco Capital Corp.'s senior debt to A- from A+ and subordinated debt to BBB+ from A, along with other ratings, and revised the rating watch to evolving from negative. Rating watch evolving indicates that ratings could be lowered, affirmed or raised. While Fitch said it views Tyco Capital's decision to borrow under its bank borrowings as the means to bolster liquidity and provide a logical means to repay maturing commercial paper in an orderly manner given current environment, the action and resultant reduction in financial flexibility is not consistent with its previous ratings.

While parent company pressures have been somewhat mitigated by Tyco Capital's continued efforts to enhance firewalls, until Tyco Capital is successfully spun off or sold it will continue to be subject to pressures faced by Tyco International as well as reduced unsecured market liquidity, Fitch said.

S&P rates Salomon ELKS linked to Cisco AA-

Standard & Poor's assigned an AA- rating to Salomon Smith Barney Holdings Inc.'s issue of $72.5 million 11% Equity-linked secs (ELKS) due 2003 linked to Cisco Systems common stock.

Moody's put Brightpoint on review for downgrade

Moody's Investors Service put Brightpoint, Inc. on review for possible downgrade. Ratings affected include Brightpoint's senior secured revolving credit facility at Ba3 and its subordinated notes at B2.

Moody's said it began the review in response to declines in profitability, limited visibility going forward as wireless industry growth begins to decelerate and an increase in financial leverage.

Despite Brightpoint's efforts to improve profitability by restructuring its operations and replacing its revolving credit facility, the outlook for growth in the global handset market is weak, Moody's said.

The rating agency said it is concerned about increases in financial leverage during 2001 and the strain that the continued poor outlook for new handsets will put on Brightpoint's finances.

"Moody's plans to discuss with Brightpoint's management its expectations for operations following the completion of the restructuring and its plans regarding the use of cash to buy back its subordinated, convertible notes prior to the put option date of March 11, 2003," Moody's said.

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