S&P cuts NRG to D on bankruptcy

Standard & Poor's lowered the ratings of NRG Energy Inc. to D following its bankruptcy filing.

The ratings at NRG Northeast Generating LLC and NRG South Central Generating LLC are unchanged since those entities were already rated D because of a previous default.

Each other rated entity - NRG Peaker Finance Co. LLC and LSP Batesville Funding Corp. - were not included in NRG's bankruptcy petition and are being reviewed for possible rating action depending on how NRG's bankruptcy proceeds.

Moody's cuts Metaldyne

Moody's Investors Service downgraded Metaldyne Corp. including cutting its $250 million

11% guaranteed senior subordinated notes due June 2012 and $98.5 million 4.5% convertible subordinated

debentures due December 2003 to Caa1 from B3 and Metaldyne LLC's $250 million guaranteed senior secured revolving credit facility due May 2007 and $399 million guaranteed senior secured term loan D due December 2009 to B2 from B1. The outlook is stable.

Moody's said the downgrade is because it believes Metaldyne's operating cash flow and debt reduction prospects will continue to fall below previous expectations over the near-to-intermediate term.

Moody's said the cause is Metaldyne's aggressive capital structure, in combination with prospects for lower automotive production volumes and the very significant level of anticipated launch expenses and capital expenditures associated with Metaldyne's roll-out over the next few years of a sizable book of value-added new business.

For the 12 months ended March 30, 2003, Metaldyne reported total debt/EBITDA leverage approximating 4.6x and 4.9x, respectively, before and after adjusting for the company's $112 million under-funded pension liability, Moody's said. Total debt and EBITDA incorporate adjustments for all off-balance sheet accounts receivable and operating lease financing. EBIT coverage of cash interest and cash preferred dividends was marginal at approximately 1.2x for the period, and the EBIT return on total assets was poor at about 4.3%.

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