S&P keep AES on watch, negative

Standard & Poor's said Monday that the ratings on AES Corp. (BB) and certain subsidiaries, including IPALCO Enterprises Inc. (BBB) and its affiliate Indianapolis Power & Light Co. (BBB), as well as the local currency and national scale ratings of Eletropaulo Metropolitana Eletricidade de Sao Paulo S.A. (Eletropaulo; BB) remain on watch with negative implications. They were placed on watch Aug. 30 following AES' announcement that it had launched an unsolicited tender offer for 43.2% of the outstanding shares of CANTV, Venezuela's only full-service telecommunications company. A successful tender would give AES control of the company when combined with the 6.9% shares held by Electricidad de Caracas. AES shares closed off 33c to $13.74.

Moody's puts Solectron on review for downgrade

Moody's Investors Service put Solectron Corp.'s long term ratings on review for downgrade, affecting $5 billion of debt, mostly zero-coupon convertibles. Moody's currently rates Solectron's senior unsecured debt at Baa3 with a negative outlook.

Moody's said the action follows Solectron's announcement that it now expects fiscal year 2002 revenues to fall below its recent low-end guidance of $16 billion to $18.5 billion.

The rating agency said its review will focus on the company's plans to "adjust its cost structure in the face of lower than expected revenues, the mix of revenues that the company is likely to obtain, its ongoing company acquisition and outsourcing program strategies, in addition to its financing plans."

Moody's commented: "While acknowledging the uncertain operating environment, Moody's said that recent pre-announcements and revised guidance by the world's largest provider of electronics manufacturing services raises concerns about the company's execution of an increasingly broad array of design, manufacturing, and services offerings, and the effectiveness of its insight into customer activity levels, which are in part related to its sector and customer mix."

The rating agency noted it expects Solectron will meet the likely put in January 2002 of approximately $800 million of zero coupon convertible notes with cash on hand, which, as of August 2001, totaled $2.8 billion. The $2.3 billion of putable bonds due in May 2003 will likely need some form of refinancing.

S&P downgrades Young Broadcasting, rates new deal B

Standard & Poor's downgraded Young Broadcasting Inc. and removed it from CreditWatch where it was placed with negative implications on Aug. 24, 2001. The outlook is stable. S&P also rated Young's planned $250 million note offering at B. For existing debt, S&P's actions include cutting the senior secured bank loan rating to BB- from BB and subordinated debt to B- from B.

S&P said the downgrade reflects "concern about credit measure weakness from sharply reduced revenue and cash flow, and the likelihood that Young's key credit measures could remain depressed for an extended time, particularly given increased economic uncertainty following the Sept. 11 terrorist attacks and U.S. military action."

Credit facility amendments and bank debt refinancing to eliminate all significant maturities until 2006 are offset by concern about extended weakness in advertising, S&P said.

S&P downgrades Exide

Standard & Poor's said it downgrade Exide Technologies Inc.'s ratings.

Affected debt includes: Exide Technologies' $300 million 10% senior notes due 2005 and its $205 million 2.9% convertible senior subordinated discount notes due 2005, both cut to CCC from B-; its various bank loans, cut to B- from B+; and Exide Holding Europe SA's DEM150 million 9 1/8% notes due 2004, cut to CCC from B-. All ratings remain on negative watch.

S&P rates Prudential Financial Capital Trust I ACEs at A-

Standard & Poor's rated Prudential Financial Capital Trust I's planned offering of $500 million of equity security units due 2006, structured as ACEs at A-.

S&P rates new King Pharmaceuticals convertibles at BB

Standard & Poor's rated King Pharmaceuticals Inc.'s planned offering of $300 million of senior unsecured convertible debentures due 2021 at BB.

S&P rates new L-3 convertibles B+

Standard & Poor's rated L-3 Communications Holdings Inc.'s recent offering of 4% senior subordinated convertible contingent debt securities due 2011 at B+.

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