Moody's downgrades EOTT

Moody's Investors Service downgraded EOTT Energy Partners, LP. The action ends EOTT's downgrade review but the company remains on review, with direction uncertain until it releases full updated financial information and/or completes is review of strategic alternatives. EOTT's last release was for the third quarter of 2001, nearly seven months old. Ratings lowered include EOTT's $235 million of 11% senior unsecured notes due 2009, cut to B3 from B1.

Noting EOTT did not meet the April 16 extended deadline to file its 2001 10-K, Moody's said the fact that the company's latest public operating and liquidity data is seven months old is incompatible with the prior ratings, given the volatile nature of its business, sensitivity to third-party confidence in its liquidity and continuing lack of a term bank facility.

EOTT cited the Feb. 11, 2002 termination of Anderson as EOTT's auditor as the reason its 2001 audit has been delayed, Moody's said.

The rating agency noted EOTT may also need at least another month to attempt to complete negotiations for term banking facilities, whose letter of credit capacity is vital to EOTT's ability to gather and trade crude oil. The senior unsecured note ratings may need to be notched down from the senior implied rating at the time, Moody's said, depending on the nature of the collateral package ultimately granted in support of EOTT's hoped for $300 million term bank facility.

Moody's puts Nortek's ratings on review for downgrade

Moody's Investors Service placed the rating of Nortek Inc. on review for possible downgrade on news that Kelso & Co. LP has submitted an offer to acquire Nortek's outstanding stock for $40 per share. Affected ratings are Nortek's $175 million 9.25% senior notes due March 15, 2007, $310 million 9.125% senior notes due Sept. 1, 2007, $210 million 8.875% senior due Aug. 1, 2008, all at B1, $250 million 9.875% senior subordinated notes due June 15, 2011 at B3, $45 million Ply Gem secured bank credit facility due Aug. 26, 2002 at Ba3, a senior implied rating of B1 and an issuer rating of B2.

Kelso & Co. is proposing to take Nortek private in a cash transaction that may use up to $120 million of Nortek funds. Nortek currently has about $220 million of cash on its balance sheet, the Moody's release said.

"Moody's review will focus on the sufficiency of liquidity at Nortek in light of the possible utilization of up to half of the company's cash balances to help fund the transaction," the release said. "The review will also focus on the impact on Nortek's debt leverage and interest coverage from the possible greater utilization of a new secured bank credit facility being negotiated to replace the Ply Gem facility. In addition, the review will consider the likelihood of management's ability to realize cost savings from operating efficiencies amounting to approximately $10 million to $13 million per year, which could help to offset the reduced liquidity."

Moody's downgrades Jazztel

Moody's Investors Service downgraded Jazztel plc and maintained a negative outlook. Ratings affected include Jazztel's €316 million 13.25% senior unsecured notes due 2009, €104 million and $90 million 14% senior unsecured notes due 2009 and €165 million 14% senior notes due 2010, all lowered to Ca from Caa3.

Moody's said its action follows Jazztel's announcement it is seeking to restructure its high yield bonds.

Although the transaction will reduce Jazztel's interest expense and improve the flexibility of the company, Moody's said it believes the restructuring will lead to material losses to par bondholders.

Fitch lowers Metris

Fitch Ratings downgraded Metris Cos. Inc.'s secured credit facility to B+ from BB+ and senior debt to B+ from BB. Also, Direct Merchants Credit Card Bank NA, a wholly owned subsidiary, had its long-term deposit rating lowered to BB from BB+. The outlook remains negative.

The downgrades reflect heightened regulatory scrutiny that the company will now be facing, "which includes prior OCC approval for dividends between DMCCB and Metris, as well as the development of more rigorous reporting requirements and implementing certain functional enhancements," Fitch said.

The negative outlook reflects the company's ongoing challenge to manage credit quality and profitability through 2002m the ratings agency added.

Metris Companies Inc. is a Minnesota-based marketer of consumer credit cards and related enhancement products. At March 31, 2002, the company reported $11.77 billion of managed loans, and $1.17 billion of common and preferred equity.

Moody's rates WCI notes B1

Moody's Investors Service assigned a B1 rating to WCI Communities, Inc.'s proposed $200 million senior subordinated notes due 2012 and confirmed its existing ratings including its $350 million 10.625% senior subordinated notes due 2011 at B1. The outlook is stable.

Moody's said its ratings reflect WCI's strategy of building master planned communities that create a need for a long land supply, its geographic concentration in coastal areas of Florida, the rising number of competitors in its markets and the cyclicality of the homebuilding industry.

Positives include WCI's 56-year history, valuable land holdings with market values exceeding current book values, stable amenities revenues and fee income from related service businesses, above industry-average margins, strong brand name recognition, seasoned management team and declining balance sheet leverage coupled with a growing equity base, Moody's said.

WCI currently develops and sells properties only in Florida, largely the east and west coasts of Florida. Consequently, an economic downturn in Florida or in the company's target out-of-state marketing areas across the country as well as any increase in the perceived risks of travel could negatively affect its operations, Moody's said.

S&P rates WCI notes B

Standard & Poor's assigned a B rating to WCI Communities Inc.'s upcoming sale of $200 million senior subordinated notes due 2012 and confirmed its BB- corporate credit rating. The outlook remains positive.

S&P said the ratings and outlook acknowledge WCI's strong position in select coastal markets, solid profitability and recent successful IPO.

"These strengths are somewhat tempered by its luxury buyer focus, geographic concentration, and the secured nature of its bank credit facility," S&P added.

WCI remains a dominant player in select sub-markets on the west coast of Florida and its position on Florida's east coast should continue to strengthen as it continues to develop the significant landholdings it purchased from the MacArthur Foundation in 1999, S&P said.

S&P also noted that WCI's historically aggressive financial profile has become more moderate. WCI used the $139 million proceeds from its IPO on March 12 to repay debt.

Moody's raises Fisher Scientific outlook

Moody's Investors Service confirmed Fisher Scientific International Inc.'s ratings and changed the rating outlook to positive from stable. Confirmed ratings include its $175 million senior secured revolver due 2004 and $294 million senior secured credit facilities at Ba3, $150 million 7.125% senior notes due 2005 at B1, $600 million 9% senior subordinated notes due 2008 at B3, a senior implied rating of B1 and a senior unsecured issuer rating at B1.

The rating outlook change reflects the company's improving credit profile, favorable operating performance, stability of revenue stream, diversification across product lines, customers and geographic locations, recent progress achieved at the international and lab workstation segments and positive growth trends in the science and clinical diagnostic distribution sector, Moody's said.

Negative factors affecting the rating include, high leverage, negative tangible equity, industry competition, industry margins and the company's acquisitive growth strategy, the rating agency added.

"Moody's anticipates that growth will be generated organically as well as through small acquisitions, with the acquisitions financed prudently with a combination of cash, debt and equity," Moody's said. "If acquisitions are financed as expected, and the current trend of deleveraging continues, a ratings upgrade may be warranted during the next 12-24 months. However, should greater than expected acquisition activity lead to a deterioration in the credit metrics, an outlook change may result."

As of Dec. 31, 2001, the company's EBITDA/Interest coverage was 2.7 times, debt to EBITDA leverage was 3.8 times and free cash flow to debt coverage was 12%.

S&P upgrades Fisher Scientific

Standard & Poor's upgraded Fisher Scientific International Inc. The outlook is stable.

Ratings affected include Fisher's $150 million 7.125% senior notes due 2005, $175 million revolving credit facility due 2004, $125 million tranche A bank loan due 2004, $100 million tranche B bank loan due 2005 and $69.2 million tranche C bank loan due 2005, all raised to BB- from B+, and its $400 million 9% senior subordinated notes due 2008, raised to B from B-.

S&P said the upgrade reflects Fisher Scientific's improving cash flows and strengthened financial profile, offset by the company's still substantial LBO-related debt burden.

The rating agency noted Fisher Scientific's broad product offerings, diverse customer base, exclusive distribution arrangements with equipment manufacturers and agreements with most major domestic group purchasing organizations are barriers to entry for new competitors.

In addition, consumable products, which represent about 80% of sales, provide a stable base of recurring revenues. Fisher has also focused on increasing its mix of higher margin, self-manufactured products, which now account for about 21% of total products sold, S&P added.

While a $290 million equity offering in 2001 improved operating performance and strengthened credit protection measures, the company still has a heavy debt burden, the rating agency said. Funds from operations to lease-adjusted debt and cash flow coverage of interest are expected to average more than 15% and 2.5 times, respectively.

S&P lowers eKabel Hessen

Standard & Poor's downgraded eKabel Hessen GmbH and put it on CreditWatch with negative implications.

Ratings affected include eKabel's €385 million 14.5% notes due 2010 and $175 million 14.5% notes due 2010, both cut to CCC- from CCC+, and Kabel Hessen GmbH & Co. KG's €850 million bank loan due 2009, cut to B- from B.

Moody's rates Vestel Electronics bonds Ba3

Moody's Investors Service assigned a Ba3 rating to the proposed issue of senior notes by Vestel Electronics Finance Ltd., a finance vehicle guaranteed on a senior unsecured basis by Vestel Elektronik Sanayi ve Ticaret Anonim Sirketi.

Moody's noted that the rating pierces but is slightly constrained by the B1 sovereign ceiling for Turkey. The outlook is stable.

Moody's said its assessment of Vestel reflects the company's leading market position in the

European OEM color television market, sustainable cost base advantages, in addition to highly efficient production lines, high production capacity and a proven ability to service customer needs, limited exposure to the Turkish lira volatility as approximately 70% of consolidated revenues are denominated in foreign currencies, mainly euros, Moody's expectations Vestel will be able to achieve positive free cash flow and the company's conservative capital structure, with a proven ability to access the equity capital markets as well as the local banking community.

Negatives include the risk of future volatility in flows as foreign exchange losses have significantly impacted the company's cash flow generation in the past, increasing price competition in television export markets and ongoing trends in product commoditization, Vestel's need to expand its current production capacity to meet volume demands, its highly concentrated customer and supplier base and potential conflicts of interest arising from the company's corporate governance structure.

Fitch rates Vestel Electronics bonds B

Fitch Ratings assigned an expected B rating to the proposed issue of notes by Vestel Electronics Finance Ltd., guaranteed by Vestel Elektronik Sanayi ve Ticaret AS.The outlook is stable.

Fitch said the rating is constrained by the Turkish sovereign rating.

Fitch noted financial covenants of the proposed bond limit Vestel's debt so that debt to EBITDA must be less than 3.0 times and its secured debt to EBITDA must be less than 0.75 times. The covenants also limit the notes, bonds or similar securities that may be backed by Vestel's account receivables to 15% of Vestel's consolidated total assets.

S&P rates Vestel bonds B-

Standard & Poor's assigned a B- rating to the upcoming bond issue from Vestel Electronics Finance Ltd. guaranteed by Vestel Elektronik Sanayi Ve Ticaret AS.

Moody's confirms TFM, downgrades Transportacion Maritima

Moody's Investors Service confirmed B1 senior implied and senior unsecured debt ratings of TFM, SA de CV and downgraded the senior implied and senior unsecured debt ratings of Transportacion Maritima Mexicana to B2 from Ba3, affecting $1.1 billion of debt.

Moody's said the confirmation of TFM takes into account approximately $170 million of additional new senior debt expected to be issued to fund the purchase of the Mexican government's remaining interest in Grupo TFM, TFM's parent company.

Moody's added that it downgraded Transportacion Maritima because the additional leverage at TFM means there is less potential for TFM to return cash in the near term and Transportacion Maritima's rating is now more reliant on its direct operations.

The rating action recognizes that it could be some time before Transportacion Maritima realizes any material cash return on its significant investment in TFM, Moody's said.

Transportacion Maritima also has a continued high level of debt relative to the sustainable cash flow of the operating units, even after material debt reduction over the last two years, the rating agency added.

S&P upgrades TuranAlem

Standard & Poor's upgraded TuranAlem Finance BV's $100 million 11.5% notes due 2004 to B+ from B.

S&P rates new Stoneridge notes B, bank facility BB

Standard & Poor's assigned a B rating to Stoneridge Inc.'s upcoming $200 million senior notes due 2012 and a BB rating to its new $100 million revolving credit facility due 2007 and its $100 million term loan due 2008. The outlook is negative.

S&P noted Stoneridge's sales for the quarter ended March 31, 2002 were $157.7 million compared with $156.1 million for the same period in 2001. EBITDA rose slightly to about $23 million compared with about $20 million in 2001.

"The improvement in EBITDA was mainly the result of expanded North American auto production and continued focus on cost-cutting initiatives by the company," S&P said.

Stoneridge continues to undertake initiatives to improve operating performance and cash generation, including implementing lean manufacturing, reducing overhead and aggressively managing working capital, the rating agency continued. These measures are expected to improve profitability in the intermediate term.

But S&P said financial flexibility is limited as Stoneridge had about $30 million in availability on its $100 million revolving credit facility as of March 31, 2002. The new credit facility is expected to result in improved liquidity and financial flexibility.

S&P rates Prime Hospitality notes B+

Standard & Poor's assigned a B+ rating to Prime Hospitality Corp.'s new issue of $200 million 8.375% senior subordinated notes due 2012.

Moody's cuts Argo-Tech outlook

Moody's Investors Service lowered its outlook on Argo-Tech Corp. to negative from stable and

confirmed its existing ratings including its $130 million senior secured credit facility due 2004 at B1 and its $195 million senior subordinated 8 5/8% notes due October 2007 at B3.

Moody's said it lowered Argo-Tech's outlook because of its concern that continued near-term softness in airline traffic will increase the company's financial risk profile through further contraction in the commercial aerospace aftermarket. The projected decreased demand follows several quarters of declines in air travel, exacerbated by the fall-off post-Sept. 11.

Argo-Tech's balance sheet remains highly levered with debt, Moody's continued, noting that at the end of fiscal 2001 on Oct. 27, 2001 debt was 4.7 times EBITDA and 2.5 times tangible assets. Debt to sales is in excess of 1.4 times for the year.

Fitch downgrades Levi Strauss notes

Fitch Ratings downgraded Levi Strauss & Co.'s senior unsecured debt rating to B+ from BB- and confirmed its secured bank facility rating at BB. It also cut the outlook to negative from stable.

Fitch said the lower outlook reflects the ongoing challenges Levi faces in stimulating top-line sales growth.

The downgrades is in response to Levi's continued decline in top-line sales, coupled with the slower than expected pace of improvement in credit protection measures, Fitch said. Also considered is the competitive operating environment, which shows no signs of easing.

However the company benefits from solid brands with leading market positions as well as the geographic diversity of its revenue base and solid cash flow generation.

Fitch said the modest gains in profit margins, with EBITDA margin increasing to 13.0% in 2001 from 12.8% in 2000, led to slower than expected improvement in the company's credit profile. Leverage as measured by total debt/EBITDA declined to 3.5 times in 2001 from 3.6 times in 2000, still somewhat higher than expected.

Fitch said the two-notch differential between the senior unsecured debt and the secured bank facility reflects the significant progress Levi has made in reducing its bank debt outstanding.

Moody's downgrades SEMCO

Moody's Investors Service downgraded ratings of SEMCO Energy, Inc. ending a rating review begun on February 13. The outlook is stable. Ratings lowered include SEMCO's senior unsecured debt, cut to Baa3, subordinated, cut to Ba1, trust preferred stock, cut to Ba1, convertible growth PRIDES, cut to Baa2, and convertible income PRIDES, cut to Baa3.

The downgrade reflects SEMCO's leverage in the 70% range, including trust preferreds, leases and a portion of the mandatory convertible PRIDES, which Moody's siad is in the high end of its peer group.

Moody's said it expect SEMCO's leverage to improve to the 60% range next year with the mandatory conversion of the PRIDES into equity but the company is expected to generate little free cash flow that could be used to further reduce debt.

There is refinancing risk over the next few years, including the potential for having to redeem $105 million of remarketable debt securities next year, Moody's added.

The company would have limited cushion under its various debt covenants if its earnings are reduced by extraordinarily warm weather or other reasons. SEMCO's asset base is small relative to its debt load.

Moody's downgrades Panaco

Moody's Investors Service downgraded Panaco Inc. including lowering its $100 million 10.625% guaranteed senior unsecured notes due 2004 to Ca from B3.

Moody's said the downgrades reflect Panaco's extremely high leverage on proven developed reserves (roughly $13.70/PD boe at 01), substantial interest burden on production (about $5.80/boe in 4Q01), and constrained liquidity; a 12% decline in proven and 23% decline in proven developed reserves between year-end 2000 and 2001, reflecting disappointing drilling results and lower gas prices at 01; declining sequential production rates as a result of the disappointing drilling results in 2001; a short four-year proven developed reserve life; a high 48% proven undeveloped component to its reserve base; and extremely high full cycle leveraged unit costs (about $30/boe in 4Q01, reflecting the negative impact of 2001 drilling results on three-year average full cycle reserve replacement costs, which were about $14.50/boe).

Moody's rates Prime Hospitality notes B1

Moody's Investors Service assigned a B1 rating to the new issue of $200 million 8.375% senior subordinated notes due 2012 by Prime Hospitality Corp. The outlook remains negative.

Moody's said the B1 rating reflects the notes unsecured and subordinated status. They will not be guaranteed by any subsidiary of Prime or business entity in which Prime owns an interest.

Moody's said Prime's ratings was placed on review for possible downgrade on Oct. 3, 2001 in response to the expected credit deterioration resulting from the Sept. 11, 2001 terrorist attack. The ratings were confirmed on March 15, 2002 given Prime's "relatively strong" credit profile for the ratings prior to Sept. 11, 2001 and that despite continued RevPar and margin pressure that the company anticipates operating cash surpluses in 2002, some of which will be applied towards balance sheet improvement.

The negative outlook, assigned on March 15 is in response to continued uncertainty about the company's RevPar performance.

S&P rates XTO notes BB

Standard & Poor's assigned a BB rating to XTO Energy Inc.'s new issue of $300 million senior unsecured notes due 2012.

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