S&P cuts NRG

Standard & Poor's downgraded NRG Energy Inc. and kept the ratings on CreditWatch with negative implications. Ratings lowered include NRG Energy's senior unsecured debt, cut to B- from B+, and NRG Northeast Generating LLC and NRG South Central Generating LLC's senior secured debt, cut to B+ from BB.

S&P also confirmed Xcel Energy Inc.'s ratings and changed the CreditWatch to developing. Ratings affected include Xcel's senior unsecured debt at BBB-, Northern States Power Inc.'s senior secured debt at BBB+, senior unsecured debt at BBB- and preferred stock at BB+, Northern States Power Wisconsin's senior secured debt at BBB+ and senior unsecured debt at BBB, Public Service Co. of Colorado's senior secured debt at BBB+, senior unsecured debt at BBB- and preferred stock at BB+ and Southwestern Public Service Co.'s senior unsecured debt at BBB and preferred stock at BB+.

S&P said the ratings now reflect NRG's stand-alone credit quality.

NRG's rating remains on CreditWatch with negative implications pending the outcome of other negotiations, notably with the construction facility banks concerning the $1 billion of required collateral and with First Energy concerning the $1.5 billion acquisition of power generating plants, S&P said.

S&P said it took the current rating action following the removal of a provision in the $800 million bank facility at parent company Xcel Energy Inc. that linked a debt service default at NRG to the bank facility.

Removal of that cross-default, plus limits on the amount multi-state utility holding companies can invest in non-utility generating companies, support the argument for lowering NRG's rating to the level that better reflects NRG's own credit risk of default, S&P said.

Most importantly, while Xcel Energy's management has stated clearly its intent to support NRG through an orderly sale of assets and debt reduction, it will not do so through equity infusions or other transfers of funds beyond the limits imposed by the Public Utility Holding Company Act, S&P added.

S&P says CMS unchanged

Standard & Poor's said CMS Energy Corp.'s ratings and outlook remain unchanged following the company's announcement that it is exploring the sale of its pipeline and field services businesses. S&P gives CMS a BB corporate credit rating with a negative outlook.

The potential sale of these assets, the bulk of which include the Panhandle and Trunkline natural gas pipelines, would provide an enormous thrust to the company's massive ongoing asset sale program undertaken to restore its balance sheet and gain some measure of financial flexibility, S&P said.

However the rating agency added that the sale would remove assets with low business risk that produce the most stable cash flow throughout the consolidated enterprise.

Moody's raises Health Care REIT outlook

Moody's Investors Service raised its outlook on Health Care REIT, Inc. to positive from stable and confirmed its ratings, affecting $525 million of securities including its senior secured debt at Ba1 and preferred stock at Ba2.

Moody's said the positive outlook reflects improvement in Health Care REIT's overall credit risk profile exhibited by enhanced portfolio diversification, stronger lease cash flow coverages for its assisted living facility (ALF) portfolio and a substantial reduction in development lending.

Health Care REIT's ability to successfully maintain and improve operating trends and to achieve greater portfolio diversification with sound credit tenants, while maintaining sound balance sheet fundamentals would support future positive ratings movement, Moody's said.

Moody's noted the REIT has made significant progress in stabilizing its ALF portfolio, represented mostly by newly developed properties and improved occupancy levels in its skilled nursing home portfolio. The REIT has recently focused its investment program on both assisted living and skilled nursing facilities to reduce potential cash flow volatility. In addition, the firm has reduced its exposure to mortgage lending in favor of lease transactions, which should enhance its position in the event of tenant bankruptcies, Moody's added.

S&P cuts Edison Mission Energy

Standard & Poor's downgraded Edison Mission Energy Funding Corp. to junk including cutting its $260 million 6.77% notes series A due 2003 and $190 million 7.33% bonds series B due 2008 to BB from BBB-. The ratings were removed from CreditWatch and a developing outlook assigned.

S&P said the action was taken despite credit strength improvements at power offtaker, Southern California Edison, rated BB with a developing outlook.

Edison Mission Energy was placed on CreditWatch on Dec. 21, 2000 as Southern California Edison fell below investment grade.

S&P noted it recently upgraded various Southern California Edison debt issues as a result of a settlement in federal court between Southern California Edison and the California Public Utility Commission over recovery of purchased power costs.

Nonetheless, the continuing regulatory and political uncertainties that dominate the credit profile for Southern California Edison can no longer support an investment-grade rating for the Big Four, S&P said.

S&P cuts Salton Sea

Standard & Poor's downgraded Salton Sea Funding Corp. to junk including lowering its $133 million 7.37% senior secured bonds series B due 2005, $109.25 million 7.84% senior secured bonds series C due 2010, $65 million 8.3% senior secured bonds series E due 2011 and $285 million 7.475% senior secured bonds series F due 2018 to BB from BBB-. The ratings were removed from CreditWatch and a developing outlook assigned.

S&P said the action was taken despite credit strength improvements at power offtaker, Southern California Edison, rated BB with a developing outlook.

Salton Sea Funding was placed on CreditWatch on Dec. 21, 2000 as Southern California Edison fell below investment grade.

S&P noted it recently upgraded various Southern California Edison debt issues as a result of a settlement in federal court between Southern California Edison and the California Public Utility Commission over recovery of purchased power costs.

Nonetheless, the continuing regulatory and political uncertainties that dominate the credit profile for Southern California Edison can no longer support an investment-grade rating for Salton Sea, S&P said.

S&P cuts FPL Energy Caithness

Standard & Poor's downgraded FPL Energy Caithness Funding Corp.'s $150 million senior secured bonds due 2018 to BB from BBB-. The ratings were removed from CreditWatch and a developing outlook assigned.

S&P said the action was taken despite credit strength improvements at power offtaker, Southern California Edison, rated BB with a developing outlook.

FPL Energy Caithness was placed on CreditWatch on Dec. 21, 2000 as Southern California Edison fell below investment grade.

S&P noted it recently upgraded various Southern California Edison debt issues as a result of a settlement in federal court between Southern California Edison and the California Public Utility Commission over recovery of purchased power costs.

Nonetheless, the continuing regulatory and political uncertainties that dominate the credit profile for Southern California Edison can no longer support an investment-grade rating for FPL Energy Caithness, S&P said.

S&P confirms Caithness Coso

Standard & Poor's confirmed Caithness Coso Funding Corp.'s $303 million senior secured bonds due 2009 at BB and removed the ratings from CreditWatch. The outlook is developing.

S&P said the action reflects the potential for credit strength improvements at power offtaker, Southern California Edison, rated BB with a developing outlook.

Caithness Coso was placed on CreditWatch on Dec. 21, 2000 as Southern California Edison fell below investment grade.

S&P noted it recently upgraded various Southern California Edison debt issues as a result of a settlement in federal court between Southern California Edison and the California Public Utility Commission over recovery of purchased power costs.

Nonetheless, the continuing regulatory and political uncertainties that dominate the credit profile for Southern California Edison keep the outlook developing for Caithness Coso, S&P said.

S&P cuts Juniper Generation

Standard & Poor's downgraded Juniper Generation LLC.'s $105 million 8.95% senior secured notes due 2012 to B+ from BBB-. The ratings were removed from CreditWatch and a stable outlook assigned.

S&P said the downgrade reflects the continued uncertainty surrounding the bankruptcy of Juniper's primary offtaker, Pacific Gas & Electric Co., rated D.

The stable outlook is indicative of the bankruptcy court's approval of PG&E's affirmation of its offtake contracts with the Juniper Bakersfield facilities, but payments to the projects are not guaranteed, S&P said.

PG&E has been paying the projects without interruption for the past 11 months and is on a payment plan that ends in December 2002 to pay its past due amounts incurred during the California energy crisis.

S&P rates Chesapeake notes B+

Standard & Poor's assigned a B+ debt rating to Chesapeake Energy Corp.'s proposed $250 million senior unsecured notes due 2012 and confirmed its existing ratings. The outlook is positive.

Proceeds from the note offering will be used to repay all amounts outstanding under its bank credit facility, finance pending and future acquisitions.

Although the increased debt leverage resulting from pending acquisitions outweighs the current good operational news, S&P said it believes that Chesapeake Energy is still well positioned to digest such acquisitions and that the use of cash flow from an eventual increase in natural gas prices will be used to deleverage the company's balance sheet, over the long term.

Chesapeake Energy's proved reserves totaled about 1.86 billion cubic feet of natural gas equivalent (bcfe) as of March 31, 2002 and are highly exposed to North American natural gas (about 90%), S&P noted.

Chesapeake Energy's core areas of operation are the U.S. Mid-Continent - about 75% of expected total production of 173 bcfe to 177 bcfe in 2002 - and the Austin Chalk Trend of Texas and Louisiana (17% of production, but a higher percentage of cash flow given richer margins).

Chesapeake Energy's growth strategy, in part, involves being an active consolidator of Mid-Continent properties, where property ownership is highly fragmented, assets can be added with little incremental general and administrative expense, and margins can be improved with economies of scale and regional purchasing power, S&P added.

Fitch keeps US Industries on watch

Fitch Ratings said US Industries, Inc.'s $375 million senior secured notes rated B- remain on Rating Watch Negative.

Fitch's action follow US Industries' announcement it has signed an agreement to sell SiTeco, its European lighting division, for €20 million.

Following the transaction, US Industries will have substantially completed its asset sale program, generating proceeds to be used for debt reduction of almost $700 million, Fitch noted.

As a result, cumulative reductions of the company's senior debt will be satisfied through Oct. 15, 2002. However the bank facilities mature on Nov. 30, 2002 and additional asset sales or cash flow generation will not be sufficient to satisfy the company's obligation at that time.

US Industries is negotiating with its bank group to extend the Nov. 30, 2002 due date of the bank facilities, Fitch added. Pro forma for the divestiture of SiTeco, the company will have about $400 million outstanding under its bank facilities.

The Rating Watch Negative recognizes that an unfavorable outcome regarding the company's ability to restructure its bank facilities could lead to default, Fitch said.

Fitch cuts Conseco

Fitch Ratings downgraded Conseco Inc. and put it on Rating Watch Negative. Ratings lowered include Conseco's 8.50% senior notes due 2003, 6.40% senior notes due 2004, 8.75% senior notes due 2006, 6.80% senior notes due 2007, 9.00% senior notes due 2008 and 10.75% senior notes due 2009, all cut to CCC from B-; 8.50% senior notes due 2002, 6.40% senior notes due 2003, 8.75% senior notes due 2004, 6.80% senior notes due 2005, 9.00% senior notes due 2006 and 10.75% senior notes due 2008, all cut to CCC from CCC+; and preferred stock and trust preferreds, cut to CC from CCC.

Fitch said the downgrade reflects increased uncertainty over Conseco's ability to meet its debt repayment schedule over the next six months.

The upcoming debt maturities as of March 31, 2002 are as follows: approximately $200 million optional bank repayment due Sept. 30, 2002, approximately $300 million public debt due Oct. 15, 2002 and approximately $300 million public debt due mid-February 2003, Fitch said.

Conseco has executed several asset sales and reinsurance transactions over the last several months to fund debt repayments. Fitch said it believes the company will require additional asset sales or other cash raising transactions. These efforts will be challenging given the difficult economic environment and the company's limited financial flexibility.

S&P cuts Ferrellgas notes

Standard & Poor's downgraded Ferrellgas Partners, LP's $160 million 9.375% senior notes due 2006 to B from B+ and raised the company's corporate credit rating to BB- from B+. The outlook is stable.

S&P said it upgraded the Master Limited Partnership to reflect the consolidated credit strength of the entity.

The senior unsecured rating reflects subordination of the master limited partnership-level debt to the debt of the operating limited partnership, where the assets of the company reside.

S&P criteria dictates that debt subordinated to such a degree for non-investment grade entities should be rated as such in the absence of real or perceived credit enhancement measures.

Despite improvements in financial performance, Ferrellgas' business position is viewed as having worsened due to external forces outside its control, S&P added. Intensifying competition amid accelerating industry consolidation will likely lead to a more formidable operating environment than previously assumed for Ferrellgas.

In addition, prior ratings have been based on closer-to-normal weather conditions, which have failed to materialize in four of the last five year, S&P said.

Fitch upgrades Northern Natural Gas

Fitch Ratings upgraded the senior unsecured debt of Northern Natural Gas Co. to B from CC and kept it on Rating Watch Positive.

Fitch said it expects to further upgrade Northern Natural Gas' senior unsecured debt into the BBB category pending the sale of Northern Natural Gas by Dynegy Inc. to MidAmerican Energy Holdings Co.

Fitch expects Northern Natural Gas will be operated as a subsidiary of MidAmerican, which is rated BBB, with a stable outlook.

Northern Natural Gas' prospective rating will be affected by the capital structure that will be adopted by the company following its purchase by MidAmerican and whether it pays off the $450 million secured loan, elevating unsecured debt to its prior senior status, Fitch said.

Fitch rates Iusacell notes B, CCC+

Fitch Ratings began coverage of Iusacell and assigned a CCC+ rating to Grupo Iusacell, SA de CV's $350 million senior notes due July 2006 and a B rating to Grupo Iusacell Celular, SA de CV's $150 million senior notes due July 2004. The outlook is satble.

The company competes in the Mexican wireless telecommunication market with 2.2 million subscribers and a 9.0% market share. The company is a distant second to Telcel, which has a 77% market share and over 18.8 million subscribers.

Iusacell's competitive position remains challenged given Telcel's nationwide network as well as the expanded presence of Telefonica through its recent acquisition of Pegaso, Fitch said.

The financial flexibility of the company remains low with adjusted debt-to-EBITDA of approximately 7.0 times and interest coverages of 1.9x, Fitch added. Debt maturities of less than a year are minimal, mitigating immediate liquidity and refinancing concerns.

Iusacell's financial results continue to soften with declining year over year growth rates and declines with the most recent interim comparisons, and have been pressured by the slowdown in the Mexican economy, Fitch said. The company continues to experience lower traffic and lower average revenue per user (ARPUs) for both prepaid and postpaid segments. Slight decreases in the higher margin postpaid subscriber base and the higher percentage of postpaid subscribers to total subscribers, albeit low, versus its competitors increase its exposure to postpaid subscriber erosion.

Fitch rates Chesapeake notes BB-

Fitch Ratings assigned a BB- rating to Chesapeake Energy's new $250 million senior note offering and confirmed its senior secured bank facility at BB+ and convertible preferred stock at B. The Rating Outlook is Stable.

Proceeds from the notes will be used for funding three pending acquisitions totaling $132 million and to repay bank debt recently incurred to purchase $43 million of senior notes due in 2004 and to purchase $38 million of natural gas properties in Oklahoma. Remaining net proceeds will be used for general corporate purposes, including the funding of future acquisitions.

Chesapeake expects to add as much as 125 Bcfe of proved reserves consisting primarily of Mid-Continent developed natural gas reserves with initial average daily natural gas production of approximately 28,000 Mcfe, Fitch noted. This would increase reserves by approximately 6.7% and daily production by about 6%. The valuation of the three transactions is about $1.35 per Mcfe.

The ratings reflect Chesapeake's long-lived, focused natural gas reserve base, the likelihood of increased production through its recent acquisitions and its modest credit profile, which assumes equity funding to help balance past and future transactions, Fitch said. Chesapeake's proved reserves, pro forma for potential acquisitions are more than 2.0 Tcfe, which provide a reserve life in excess of 10 years. A Additionally, approximately 90% of Chesapeake's proved reserves are natural gas and are primarily located in the very familiar Mid Continent region. In fact, Chesapeake's last six significant acquisitions have all been in the Mid-Continent region where it has a significant amount of infrastructure in place and has had proven success, Fitch said. The rating agency expects Chesapeake to achieve synergies through its recent acquisitions and to expand upon the current production that each of its potential acquisitions is currently realizing.

Moody's raises Bradley Operating

Moody's Investors Service raised Bradley Operating LP to the investment-grade level of Baa3 from Ba2 and assigned a Baa3 rating to the $350 million senior unsecured bank credit facility of

Heritage Property Investment, LP and Bradley Operating Partnership as co-borrowers. The outlook is stable.

Moody's said the actions anticipate that Bradley's parent Heritage will continue to reduce its overall debt - in particular its secured debt - and will maintain a laddered debt maturity profile.

Effective leverage (debt and preferred as a percentage of gross assets) declined to under 50%, from approximately 70%, and coverages improved to over 2x, Moody's noted.

In addition, the shareholder ownership by New England Teamsters and Pension Fund Industry (NETT) and The Prudential fell to roughly 53%, from nearly 100%.

Despite these improvements, Heritage's ratings are constrained by still high secured debt levels and low coverages, which are weaker than those of most of its peers, Moody's said. Secured debt as a percentage of gross assets was 25% at June 30, 2002, and EBITDA/interest expense and preferred distributions was around 2.2X for the same period.

Moody's withdraws HMV ratings

Moody's Investors Service withdrew its ratings on HMV Group plc including the £440 million senior secured credit facility at B1, £135 million 10.875% senior subordinated notes due 2008 and $125 million 10.25% senior subordinated notes due 2008 at B3 and $81.3 million 12.875% senior cumulative redeemable preference shares due 2009 at Caa2.

Moody's said the action follows HMV's refinancing of all its publicly rated instruments as a result of the company's recent initial public offering.

S&P cuts Green Property

Standard & Poor's downgraded Green Property plc to junk and kept the company on CreditWatch with negative implications.

Ratings lowered include Green's £150 million 7.25% bonds due 2016, cut to BB from BBB-.

S&P lowers Antenna TV outlook

Standard & Poor's revised its outlook on Antenna TV SA to negative from stable. The company has a BB- corporate credit rating.

S&P withdraws Wise Alloys rating

Standard & Poor's withdrew its ratings on Wise Alloys LLC after the company decided not to go ahead with its proposed financing.

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