S&P cuts Mrs. Fields to CC

Standard & Poor's said it lowered its outstanding ratings on Mrs. Fields Original Cookies Inc., including the corporate credit rating and senior unsecured debt rating to CC from CCC.

The rating action follows the company's announcement of an exchange offer for all of its outstanding $140 million senior unsecured notes due 2004 at a price of $850 in cash per $1,000 principal amount. In addition, holders of notes that are considered qualified institutional buyers and investors may exchange $1,000 principal amount of notes for $1,000 principal amount of new Mrs. Fields Famous Brands 9% senior secured notes due 2011.

S&P said it believes the offer is tantamount to a default because the total value of securities and cash offered is substantially less than the originally contracted amount, and the rate on the new notes is lower than on the original notes.

On completion of the transaction, S&P said it expects to lower the ratings to D.

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