Moody's rates new GTech notes Baa1

Moody's Investors Service assigned a Baa1 rating to GTech Holdings Corp.'s proposed $200 million senior guaranteed notes and confirmed its existing long-term rating. The outlook remains stable.

Pro forma for this new issue, total debt to EBITDA will increase from 0.8x to about 1.2x and interest coverage will decline slightly but remains strong at over 20x, Moody's said.

GTech recently instituted a dividend that will cost around $40 million a year and, as a result, retained cash flow to debt will drop from slightly over 100% to 64% on a pro forma basis.

S&P rates new GTech notes BBB

Standard & Poor's assigned a BBB rating to GTech Holdings Corp.'s proposed $200 million senior notes due 2010 and confirmed its BBB corporate credit and senior unsecured debt ratings. The outlook is positive.

Pro forma for the proposed issue, operating lease-adjusted total debt to EBITDA is less than 1.5x and EBITDA coverage of interest expense over 15x.

At Aug. 23, GTech had $94 million of cash and short-term investments, plus full availability under its $300 million revolving credit facility maturing June 2006.

Moody's cuts Duane Reade convertible to B1

Moody's Investors Service lowered the rating on Duane Reade Inc.'s senior convertible notes due 2022 to B1 from Ba3 and revised the outlook to negative from stable due to an expectation that financial flexibility will not improve over the medium term because of slower-than-expected sales growth.

Specifically, Moody's said the downgrade of the convertible reflects the increased weight of the effectively senior secured bank facility in the company's capital structure following the July 2003 commitment increase to $200 million from $143 million.

The ratings reflect the leveraged financial condition, especially adjusted for operating lease obligations and exposure to the economic fortunes of a restricted geographic region in and around Manhattan.

The outlook reflects a belief that the currently assigned ratings could fall over the intermediate term if sales growth remains slow and the company is unable to adjust its cost structure to a lower-than-expected revenue base, Moody's added.

Moody's puts Lowe's on review for upgrade

Moody's Investors Service placed the long and short term ratings of Lowe's Cos. Inc. under review for possible upgrade, including the A3-rated convertibles.

Lowe's continuing strong financial and operating performance, as well as the fact that it has turned free cash flow positive in spite of its very significant new store growth, prompted the review.

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