Fitch puts Kamps on positive watch

Fitch Ratings put Kamps AG on Rating Watch Positive including its senior unsecured debt at BB.

Fitch said the action follows the announcement that Kamps will sell its 49% stake in French bakery producer Harry's for €300 million to a related company of parent the Barilla group, thereby reducing its leverage.

As part of the transaction, Kamps has exercised the option to buy the remaining 51% of Harry's it does not own. This will take place on Dec. 30, 2003 and will be funded by a loan from a Barilla-related entity called Finbakery Netherlands to Kamps (France) SAS who will then own 100% of Harry's. Kamps will own a put option to sell the whole of Kamps (France) SAS for €300 million to Finbakery Netherlands between Dec. 31, 2003 and Jan. 31, 2004. Kamps' put option to Finbakery Netherlands will be exercised during this one month period.

Fitch said it view the transaction positively as Kamps should receive cash of €225 million by the end of 2003 and a deferred €75 million payment within five years related to the effective transfer of its 49% stake. Uncertainty surrounding the Harry's existing call option will be alleviated. Furthermore, Harry's remains within the larger Barilla group and will continue to provide benefits from cross-selling and from its leading position in France, one of the largest bakery markets in Europe.

Under the eurobond covenants, the disposal proceeds to be received by Kamps will be used to pay down debt - a reduction of drawings under the bank facilities. Based on fiscal 2002 figures or fiscal 2003 forecasts, the reduction in leverage (without treating the €75 million deferred consideration as cash) equates to a 0.5x reduction in the net debt/EBITDA ratio (fiscal 2002 on a pre-exceptional basis was 5.0x).

S&P says Freeport unchanged

Standard & Poor's said Freeport-McMoRan Copper & Gold Inc.'s ratings are unchanged including its corporate credit at B with a stable outlook after the company's second-quarter earnings announcement.

Freeport posted net income of $57 million for the quarter, a substantial increase from $6 million a year earlier due to higher-grade ore and higher gold prices.

Although the company's credit measures and free cash flow generation are quite strong, owing to its low cost position, the ratings on Freeport continue to be constrained by the sovereign credit rating on the Republic of Indonesia, S&P said. Operating risks in Indonesia remain considerable.

Moody's rates Hanover Compressor liquidity SGL-3

Moody's Investors Service assigned an SGL-3 liquidity rating to Hanover Compressor.

Moody's said the SGL-3 rating reflects a mix of supporting and restraining factors. Liquidity is supported by expected firm-to-rising operating cash flow that appears to cover lease rental expense, interest expense, and capital spending (including significant growth capital) over the next 12 months and cash balances, cash flow, and modest announced asset sales indicate full internal coverage of negligible debt maturities plus the ability to reduce revolver outstandings by up to $40 million.

Liquidity is restrained by tight covenants in the existing bank revolver that could be breached and/or restrict access to undrawn availability by year-end 2003 when the amended covenants tighten to original levels and modest alternative liquidity from asset sales since all assets are pledged to the bank revolver and synthetic leases.

Moody's cuts Cable & Wireless, rates convertibles Ba3

Moody's Investors Service downgraded Cable & Wireless plc including cutting its £200 million 8.75 % eurobonds due 2012 and $400 million 6.5% eurobonds due 2003 to Ba3 from Ba1 and Cable & Wireless International Finance BV' £200 million 8.625% guaranteed eurobonds due 2019 to Ba3 from Ba1. Moody's assigned a Ba3 rating to its £258 million convertible notes due 2010. The outlook is negative.

Moody's said the downgrade reflects heightened concerns with respect to C&W's potential restructuring costs in light of the now increased scope of restructuring initiatives (full exit of the U.S. global business versus the partial exit previously contemplated) and uncertainty regarding ultimate exit costs; increased execution risks associated with the company's restructuring plan; continued uncertainty with respect to the ultimate effect of the proposed restructuring on C&W's continuing businesses and the overall prospects of C&W's remaining operations (specifically the continuing global operations - U.K., Japan and Continental Europe - which also experienced some difficulties last year); and a sizable FRS 17 pension deficit (£578 million at March 31, 2003, £494 million in the U.K.) which could result in a steady increase in pension costs going forward.

Although operating cash flow relative to gross debt and gross lease adjusted debt levels remain weak, the ratings continue to positively reflect C&W's large cash balance and ample liquidity position and the solid cash flow generation of the company's national operations, Moody's added. The ratings also positively consider management's strong focus on containing costs and increasing cash flow as well as the substantial improvement in on-going profitability that should ultimately result from the U.S. exit.

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