S&P cuts Global Crossing to D on bankruptcy

Standard & Poor's on Monday lowered its ratings on Global Crossing Ltd. and certain related entities to D, following the company's bankruptcy filing, and removed the ratings from negative watch. S&P added that the ratings on Asia Global Crossing Ltd. remain on watch with negative implications because the 58.8%-owned subsidiary was not part of the bankruptcy filing.

Fitch rates new Transocean exchange notes at BBB+

Fitch on Monday assigned a BBB+ senior unsecured debt rating to Transocean Sedco Forex Inc.'s proposed exchange offering for all of the outstanding publicly held debt of its indirect subsidiary R&B Falcon Corp. Transocean Sedco Forex expects to offer notes that have the same principal amount, interest rate, redemption terms and payment and maturity date as the R&B Falcon notes sought for exchange. The rating outlook for Transocean is stable, Fitch said, and the rating is based on Transocean's improving credit profile, superior offshore drilling fleet and the outlook for a mid-cycle commodity pricing environment in 2002.

Transocean's rating is slightly aggressive for its credit profile, but Fitch is comfortable with the fact that the company is gradually improving its balance sheet. Additionally, it is the largest offshore driller in the world with nearly 170 mobile offshore and barge units. The offshore drilling fleet serves every major offshore market. Not only is Transocean the largest drilling company, but its fleet is technologically superior to its peers and is capable of drilling in water depths up to 10,000 feet.

Fitch expects 2002 oil and gas prices to return to mid-cycle levels, which should lead to normal drilling activity, especially internationally. Fitch's 2002 expectations for Transocean depend on a number of high revenue, high margin floating vessels renewing contracts at similar terms, particularly in international waters. If Transocean is unable to obtain similar engagements for the rigs coming off contract in the next two quarters, it will be necessary to closely review the credit rating, Fitch said.

Moody's puts Charming Shoppes on review for possible downgrade

Moody's investor's service placed the debt ratings of Charming Shoppes, including the B2 rating for the $96 million convertible subordinated notes due 2006, under review for possible downgrade as a result of weak fourth quarter operating results, and higher uncertainty about future performance and integration of the Lane Bryant acquisition. The review action follows the company's announcement that it will report a net operating loss for the fourth quarter, and that it will be closing a number of stores in 2002.

Charming Shoppe's leverage measures remain high following the acquisition of Lane Bryant in August 2001, and the company is facing the challenges of integrating a substantial acquisition during an increasingly difficult retail environment, Moody's said. The review will focus on the risks that the company's operating challenges may place a greater than expected strain on the management or financial position, or that the company may face margin declines in excess of expectations. The company's strong brand names and liquidity position will also be a factor in the review, Moody's added.

S&P rates Boise Cascade notes at BB+

Standard & Poor's on Monday assigned a BB+ rating to Boise Cascade Corp.'s $150 million 7.5% senior unsecured notes due 2008. The ratings reflect Boise Cascade's slightly below-average business position in cyclical paper and wood products markets, and high debt levels resulting from an aggressive, primarily debt-financed acquisition program within its office products business, S&P said.

Heavy capital spending, a series of largely debt-financed acquisitions and weak paper markets have kept debt leverage at high levels, despite the application of proceeds from divestitures towards debt reduction, S&P said. Credit protection measures should continue to gradually improve, with debt to capital moving toward the 50% to 55% range over time, from between 55% and 60% for the past few years. Funds from operations to debt is expected to average in the low-20% area through the industry cycle.

Fitch rates new McKesson notes at BBB

Fitch has assigned a BBB rating to McKesson Corp.'s $400 million senior unsecured notes issue and affirmed the company's BBB senior unsecured debt rating. The negative rating outlook, Fitch said, is in deference to still outstanding shareholder suits filed against the company related to alleged accounting fraud at the former HBOC which merged with McKesson in 1999. Fitch emphasized, however, that the outlook is not reflective of the fundamentals of the company as McKesson's core business remains strong and appears to have demonstrated a legitimate turn-around in profitability. Additionally, despite the recent competitor consolidation, McKesson Corp.'s primary business, the Supply Solutions Segment (formerly the Health Care Supply Management segment), remains stable and is expected grow at or above industry rates while maintaining a strong market share position in pharmaceutical distribution. In fact, Fitch said, despite the recent competitor consolidation, McKesson's primary business - the supply solutions segment, formerly the healthcare supply management segment - remains stable and is expected grow at or above industry rates while maintaining a strong market share position in pharmaceutical distribution.

Moody's downgrades Malan Realty, withdraws ratings

Moody's Investors Service downgraded Malan Realty Investors, Inc.'s convertible subordinated debentures to Caa3 from B3 and withdrew the ratings.

Moody's said its action is in response to Malan's exposure to Kmart Corp.

Malan has 27 properties leased to Kmart and derives approximately 25% of its annualized base rents from Kmart, Moody's said. "This rating action reflects the potentially adverse impact on Malan's financial profile and coverages from the likely exercise by Kmart of its lease rejection rights as the retailer works its way through its reorganization process."

Moody's also pointed to uncertainty about the extent and ultimate success of Kmart's reorganization and the challenging retail environment.

S&P assigns BB- rating to Ritek convertibles

Standard & Poor's assigned a BB- rating to Ritek Corp.'s $200 million convertible bonds due 2007.

S&P rates ChipPAC convertibles B-

Standard & Poor's assigned a B- rating to ChipPAC Inc.'s $50 million 8% convertible subordinated notes due 2011.

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