Moody's changes outlook on Conseco and affiliates to negative

Moody's changed the outlook on Conseco Inc.'s credit ratings to negative from stable. Approximately $6.1 billion of debt securities are affected by the ratings change, according to the rating agency, which also confirmed the company's senior secured credit ratings at B1.

The action is based primarily on Conseco's slower than anticipated progress in improving key indicators of operating performance, as reflected by the company's recently announced intention to take $475 million of after-tax charges when it announces its third quarter earnings, Moody's said.

The following ratings were among those confirmed and the outlook for the ratings was changed to negative:

--Conseco, Inc. senior debt rating (B1) and senior subordinated debt rating (B3);

--Conseco Finance Corp. senior debt rating (B1) and senior subordinated debt rating (B3).

According to Moody's, the operating performance of the Carmel, Indiana-based financial services holding company's insurance and finance subsidiaries is likely to be pressured by external market conditions. "That could further constrain the financial flexibility of the holding company by reducing the sources of cash available to it," the rating agency stated.

The company's access to the capital markets could also diminish because of a harsher economic and investment environment, according to Moody's.

Moody's downgrades Microcell senior notes to Caa1, on review

Moody's Investors Service said it downgraded $960 million of senior notes issued by Microcell Telecommunications, Inc. to Caa1 from B3 and put the ratings on review for possible further downgrade. Affected are Microcell's 14% senior discount notes due 2006, its 11 1/8% senior discount notes due 2007 and its 12% senior discount notes due 2009.

Moody's said it took the action in response to "the company's ongoing difficulty in attracting additional capital to fund its business plan, the likelihood that much of the additional capital that may be accessed will rank senior to the rated discount notes of the company, and the probability that the capital constraints under which the company operates may adversely affect its ability to profitably grow its operations."

The review for possible further downgrade "reflects our concerns about the amount, type and timing of the additional capital Microcell will be able to attract."

Moody's added that it is concerned about the impact of the reduced capital spending plan on Microcell's operations and the company's ability to compete with better capitalized competitors in a weak economy.

Fitch removes Valhi, NL debt from watch negative

Fitch removed the rating watch negative assigned to Valhi's senior unsecured and senior secured debt ratings of BB- and NL Industries' senior secured rating of BB.

Fitch said it took the action after the withdrawal of a planned transaction under which NL shares of common stock would be exchanged for newly issued shares of common stock and debt securities of

Titanium Metals Corp.

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