Fitch cuts Markel convertibles to BBB-

Fitch Ratings reduced Markel Corp.'s senior debt and 0% convertible notes ratings to BBB- from BBB and the trust preferred stock rating of Markel Capital Trust to BB+ from BBB- following Markel's fourth quarter announcement of an additional $70 million in pretax charges and reserve strengthening at Markel International. These charges were not contemplated when the previous ratings were assigned, Fitch said, and the downgrade reflects the anticipated drag placed on those operations by losses at Markel International.

Moody's puts Korea Telecom, Korea Tobacco on review for possible upgrade

Moody's Investors Service placed the foreign-currency denominated long-term ratings of Korea Telecom (Baa2) and Korea Tobacco & Ginseng (Baa2) under review for possible upgrade. Moody's said the review was prompted by its decision to review for possible upgrade Korea's Baa2 long-term foreign currency country ceiling for bonds and notes. The review will consider the degree to which the current ratings are constrained by the existing sovereign ceiling.

S&P affirms Ciena, revises outlook to negative

Standard & Poor's affirmed its B+ corporate credit and senior unsecured debt ratings on Ciena Corp. The outlook was revised to negative from stable, S&P said, reflecting a substantially larger-than-expected decline in revenues for the quarter ended Jan. 31 and likely further revenue declines in a highly uncertain telecommunications market.

The ratings continue to reflect Ciena's narrow business position, substantial leverage and risks of continuing technology evolution, offset by the company's good financial flexibility, S&P said. The company's substantial reliance on a very limited customer base and highly uncertain business conditions could lead to significant further declines in revenues. Should conditions not stabilize in the next few quarters, S&P said the ratings could be lowered.

Fitch affirms NiSource, puts on negative watch

Fitch Ratings affirmed the debt ratings of NiSource Inc., including the BBB- rating for the convertible PIES, and its subsidiaries, but placed the ratings on negative watch. Fitch said the action reflects NiSource's current high leverage and weak liquidity position as well as the execution risk associated with the company's stated plan to improve its financial position through various key transactions, most notably the sale of equity by mid-2002. The planned common stock issuance should occur subsequent to the resolution of NIPSCO's pending rate investigation by the Indiana Utility Regulatory Commission, which is expected to be completed over the next few months.

Moody's confirms Getronics convertible at B1

Moody's Investors Service confirmed the Baa3 ratings for Getronics NV's long-term senior debt and the Ba1 ratings for the company's subordinated convertible bonds.

Getronics' conservative financial strategy, including its recently accelerated conversion of bonds to equity and the use of free cash flows for debt reduction, largely alleviates the cash-flow pressure emanating from a restrained investment pattern on the part of its major customers, Moody's said. The rating outlook remains negative, the rating agency said, reflecting the challenges facing the company of swiftly adjusting its capacity and cost base to match a revenue forecast of no growth to very modest growth.

S&P puts Elan on negative watch

Standard & Poor's put Elan Corp., plc on CreditWatch with negative implications.

Ratings affected include Elan Finance Corp. Ltd.'s $1.429 billion LYONS due 2018 and Dura Pharmaceuticals Inc.'s $287.5 million 3.5% convertible subordinated notes due 2002, both rated BBB-, as well as the company's senior notes and credit facility at BBB and senior notes issued by subsidiaries at BBB-.

Moody's cuts Rite Aid, rates new convert at Caa3

Moody's Investors Service rated Rite Aid Corp.'s new $250 million of 4.75% convertible notes due 2006 at Caa3. Moody's also downgraded all other ratings of the company, including the senior secured notes to Caa1 from B3 but confirmed the redeemable preferred stock at C. The rating outlook is negative.

The ratings reflect Moody's concerns with respect to the long-term sustainability of the company's current capital structure, given the opinion that operating cash flow will not reliably cover cash interest payments going forward. Moody's believes that operating cash flow may not grow enough to support all of the company's liabilities over the intermediate term, in spite of balance sheet debt reduction of $2 billion during 2001. The negative outlook reflects the possibility that ratings could be lowered again within the next several quarters if liquidity constraints were to cause pressures in paying all obligations according to contractual terms or if the company experienced difficulties in complying with bank agreement covenants. Progress towards substantial leverage reduction, a stronger liquidity position and improved operations will be necessary for rating improvement.

Fitch affirms CMS Energy, takes various actions on units

Fitch Ratings affirmed the senior secured and senior unsecured ratings of CMS Energy Corp. and its Consumers Energy Co. and CMS Panhandle Pipe Line Co. units, downgraded Consumers Energy's preferred securities and changed the outlook on Panhandle Pipe Line to negative from stable, resulting in the outlooks for all three companies being negative. Ratings affected include CMS Energy's senior unsecured debt at BB+ and its preferred stock at BB-, Consumers Energy's senior secured debt at BBB+ and its preferred stock, cut to BB+ from BBB-, and CMS Panhandle Pipe Line's senior unsecured debt at BBB.

Fitch said its action concludes a review that examined CMS' asset and business divestitures and debt reduction.

Fitch noted the actions reduced parent company debt by $613 million between September 2001 and February 2002.

The downgrade of Consumers' preferred and trust preferred ratings reflects Fitch's notching practice to reflect a differential in the ultimate recovery prospects for holders of junior securities relative to senior debt.

The negative rating outlook reflects: the continuing high level of consolidated and parent debt; tight cash flow coverage of projected interest expense due to the elimination of cash flow from the businesses sold in 2001; and unfavorable market environment for further asset sales, Fitch said.

Despite the progress, consolidated debt remains relatively high for the BB+ category, with financial leverage of approximately 66% after completed asset sales, Fitch added. In addition, CMS is burdened by almost $3 billion of debt at the parent level.

S&P keeps Markel on negative watch

Standard & Poor's said Markel Corp. and its subsidiaries remains on CreditWatch with negative implications after its recent earnings announcement.

S&P put Markel on CreditWatch on Sept. 20, 2001 after it announced a $75 million pretax charge related to the World Trade Center attacks.

Markel's operating performance remains below S&P's expectations, the rating agency said, noting the group ended 2001 with a net loss of $125.7 million, compared to a net loss of $27.6 million in 2000.

The 2001 combined ratio was 124%, "which is a significant departure from Standard & Poor's expectation" of a ratio of less than 110%.

S&P said Markel's ratings could be lowered up to two notches on completion of the review.

S&P cuts Telesystem International to SD

Standard & Poor's downgraded Telesystem International Wireless Inc.'s corporate credit rating to SD from CC after completion of an exchange offer launched by the company Nov. 29, 2001. Telesystem International's secured debt remains at CCC+ and on CreditWatch with developing implications.

S&P said the exchange, part of a comprehensive recapitalization, involved an offer by Telesystem International of C$45 million for its C$150 million 7% equity subordinated debentures.

S&P said it is counting the exchange as a default because it includes an exchange at a value materially less than the contracted amount, in this case 50 Canadian cents on the dollar.

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