S&P puts Telesystem International on positive watch

Standard & Poor's put Telesystem International Wireless Inc. on CreditWatch positive including its $220 million 14% notes due 2003 at CCC+.

S&P said the CreditWatch placement follows the announcement by Telesystem International that proceeds from an offering of senior notes by Mobifon Holdings BV will be used to retire the remaining principal balance on Telesystem International's senior guaranteed notes due December 2003.

Following repayment of the notes, Telesystem International will be substantially debt free at the corporate level, S&P said.

S&P rates Mobifon notes CCC+

Standard & Poor's assigned a CCC+ rating to Mobifon Holdings BV's planned $230 million 11.5% senior notes due 2009. The outlook is stable.

S&P said the ratings reflect Mobifon's position as the leading cellular operator in Romania, continuing subscriber and revenue growth, high (more than 50%) EBITDA margins, and substantial free cash flow after debt servicing at the operating company level.

The ratings are supported by the strategic support from Vodafone Europe BV, which holds a 20% interest in Mobifon SA, as well as a reasonably stable economic and political environment in Romania, S&P added. These strengths are offset by relatively high leverage for an operator in a developing country, substantial foreign currency exposure given all of Mobifon's debt is denominated in U.S. dollars, and the capital structure, whereby interest payments on the Mobifon Holding's notes are dependent on dividends or other shareholder distributions from Mobifon SA.

S&P said it expects that pro forma consolidated debt for Mobifon will peak at about $543 million in 2003, consisting of the $230 million Mobifon Holdings notes; and at the Mobifon SA level a senior secured credit for up to $300 million and a capital lease facility of $13 million.

S&P revises Petroleum Geo-Services' Oslo Seismic watch to developing

Standard & Poor's kept Petroleum Geo-Services ASA on CreditWatch negative including its senior secured debt at C and PGS Trust I's preferred stock at D. but revised the watch on subsidiary Oslo Seismic Services Inc. to developing from negative including its senior secured debt at CC.

S&P said the action follows the announcement of the company's restructuring plan. The plan includes a prepackaged bankruptcy petition under Chapter 11 of the U.S. bankruptcy code that would reduce the company's debt burden by half.

S&P said it believes that Oslo Seismic's mortgage notes will remain unimpaired if Petroleum Geo-Services can complete its proposed debt restructuring plan.

Fitch keeps Petroleum Geo-Services on watch

Fitch Ratings said Petroleum Geo-Services ASA remains on Rating Watch Negative including its senior unsecured debt rating and trust preferred securities at C.

Fitch said the action follows Petroleum Geo-Services' announcement that it has achieved agreement in principle on the terms for a proposed financial restructuring with a majority of both its banks and bondholders and a substantial group of its largest shareholders.

However, restructuring is considered to be an event of default and the rating of Petroleum Geo-Services' senior unsecured debt and its trust preferred securities will be lowered to D upon implementation of the restructuring, Fitch said.

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