Moody's cuts outlook on Charter Communications to stable from positive

Moody's Investors Service cut its outlook for Charter Communications to stable from positive. Ratings affected include the senior secured (stock only) debt and of the company's subsidiaries, rated Ba3, and their senior unsecured debt, rated B2, and the parent company's convertible senior unsecured debt rated B3. The action affects $19 billion of securities.

Moody's said its outlook revision reflects several factors which combined points to a reduced likelihood that Charter's debt will be upgraded, "at least not in their entirety, over the near-to-medium term rating horizon."

In particular, Moody's recalled its prior claim that the "absolute amount and mix of equity and other junior capital" raised earlier this year fell "somewhat short" of previous management guidance. Given the downward trend in Charter's since then, Moody's believes the chances of a follow-on offering are "greatly diminished."

Moody's downgrades Primedia, senior debt cut to B1 from Ba3

Moody's Investors Service downgraded Primedia Inc.'s ratings, affecting $1.7 billion of debt. Among the ratings lowered are: Primedia's $500 million of 8.875% senior notes due 2011, its $250 million of 7.625% senior notes due 2008, its $300 million of 8.5% senior notes due 2006 and its $100 million of 10.25% senior notes due 2004, all cut to B1 from Ba3; and its $125 million of 9.2% exchangeable preferred stock, its $200 million of 10% exchangeable preferred stock and its $250 million of 8.625% exchangeable preferred stock, all cut to Caa1 from B2. The outlook is negative.

Moody's said the downgrade and negative outlook reflect "a material deterioration in Primedia's cash flow, operating results well below Moody's expectations, and uncertainty surrounding the company's ability to recover in the intermediate-term."

The rating agency observed: "As Primedia has attempted to grow by leveraging its existing content in the Internet space, the revenue growth associated with the company's new media strategy has not met expectations. An additional strain was placed on the company by the deterioration of both its branded and non-core businesses."

Cash flow margin, historically around 20%, have fallen to the mid to low teens recently, Moody's said. "Given the weak advertising environment, which has been exacerbated by the events of September 11, Moody's views meaningful cash flow growth to be unlikely for the foreseeable future."

Moody's confirms Friendly Ice Cream after tender offer

Moody's Investors Service confirmed the ratings of Friendly Ice Cream Corp., affecting $293 million of debt, including its $93 million secured credit facility rated B2 and its $200 million 10½% senior notes due 2007 rated B3. The outlook continues to be stable.

Moody's said it examined the ratings after Friendly's announced it plans to pay down its current bank facility, to launch a tender for $28 million face value of senior notes and to arrange a new revolving credit facility. Proceeds from mortgaging about 55 stores and selling and leasing back about 35 stores will be used to pay down the debt.

Moody's said its ratings reflect "the intense competition within the casual dining segment of the restaurant industry, the company's leveraged financial condition, dependence on a few key commodities such as cream and sugar, and the significant seasonality of ice cream sales. The ratings also recognize that, while the company will successfully pay down the maturing bank loan as a result of monetizing assets, the company now has sold or mortgaged most real estate."

However the rating agency also noted the company's established position in the northeast, the strength of its trade name and modestly better operating margins and slightly improved interest coverage in the past few quarters.

S&P cuts Trump Hotels & Casino to CC, negative watch

Standard & Poor's downgraded Trump Hotels & Casino Resorts Holdings LP and its subsidiaries and put the ratings on CreditWatch with negative implications. Ratings affected include Trump Hotels & Casino Resorts Holdings LP senior secured debt and Trump Hotels & Casino Resorts Funding Inc. senior secured debt, both cut to CC from CCC+; Trump Atlantic City Associates senior secured debt cut to CC from B- and Atlantic City Funding II Inc. and III Inc.'s senior secured debt, also cut to CC from B-

S&P said the actions follows Trump's announcement that because it expects that future gaming in New York will severely affect operating performance in Atlantic City it is seeking to negotiate the terms of its public debt to better reflect this environment.

S&P added: "The company also announced that until discussions with bondholders are final, future scheduled interest payments would be withheld, including the payment due today. If the payments are withheld, the ratings will be revised to D following each interest payment date."

Moody's upgrades YPF foreign currency bonds to Ba3

Moody's Investors Service upgraded the long-term foreign currency bond rating of YPF SA to Ba3 from B2 while confirming the company's global local currency issuer rating at Baa1. Moody's noted the Ba3 foreign currency bond rating is six notches above Argentina's Caa3 long-term foreign currency ceiling for bonds and notes.

The action concludes a review for upgrade on the foreign currency bond rating of YPF resulting from Moody's decision to allow certain issuers to pierce their respective country ceilings. The outlook on both local and foreign currency ratings is negative.

The Ba3 foreign currency rating is lower than the local rating to reflect convertibility risk, that is the likelihood that the government will declare a debt moratorium to counter a foreign currency crisis, Moody's said.

Moody's reviews Corrections Corp. Of America for possible upgrade

Moody's put Corrections Corp. Of America (Caa1 senior unsecured debt) under review for possible upgrade, affecting approximately $860 million of the company's debt.

The review affects the company's senior unsecured debt (Caa1); secured bank facility (B3); preferred stock (Ca); senior unsecured debt shelf (P)(Caa1); preferred stock shelf at (P)(Ca).

According to Moody's, the review "reflects the improving financial profile of CCA, including its proven ability to maintain its leadership position in the correctional property development, ownership and management businesses, its continued improvement in operating results, and the strengthening of its financial profile."

Moody's anticipates a one-notch upgrade of all its ratings. The company's ratings would thus be upgraded as follows: senior secured credit facility to B2, from B3; senior unsecured debt to B3, from Caa1; and preferred stock to Caa2, from Ca. The rating outlooks would be stable.

Corrections Corporation of America is based in Nashville, Tenn.

S&P keeps DTE Burns Harbor on negative watch

Standard & Poor's said its BB rating on DTE Burns Harbor LLC's $163 million senior secured notes remains on CreditWatch with negative implications where it was placed on May 4, 2001.

The proceeds from the notes were used by DTE LLC to purchase the number one coke battery from Bethlehem Steel Corp. (D/---/---). DTE LLC's rating is unchanged and remains on CreditWatch following the filing of Chapter 11 bankruptcy protection by Bethlehem Steel.

S&P said the rating is still on CreditWatch because of DTE LLC's reliance on sales of coke to Bethlehem Steel for a portion of its cash flow. Cash flow from other revenue sources, specifically Section 29 tax credits, is not sufficient to completely cover debt service.

However the rating agency noted the project can sell coke on the spot market if any of Bethlehem Steel's facilities do not require coke.

But S&P warned: "However, should the project be forced to operate on the spot market, or should a substantial delay in payment threaten the project's solvency, a substantial downgrade should be expected."

Moody's cuts Prestolite's sr unsec notes to Caa2

Moody's Investors Service downgraded Prestolite Electric Inc.'s guaranteed senior unsecred notes due 2008 to Caa2 from B3. The outlook is negative.

The rating agency said the action reflects the "negative impact of weakened economic conditions within several of the company's key markets, along with ongoing political and monetary instability in Argentina."

Moody's continued: "The rating actions and negative outlook reflect Moody's concern that Prestolite remains a highly leveraged company that is having difficulty covering its cash interest requirements with cash flow generated from operations. The company currently also has limited liquidity, which may prove to be insufficient in the event that conditions within Prestolite's key markets continue to slide."

Moody's changes Avecia outlook to negative

Moody's Investors Service confirmed the B2 rating on Avecia Group plc's bonds but changed the outlook to negative.

The action follows news that discussions are in progress for the disposal of Avecia's Stahl business to Investcorp.

Moody's said the transaction will be neutral for bondholders financially and noted the remaining divisions provide diversity. It noted "the increased focus on higher growth and margins, and the reduced likelihood of further fully debt financed acquisitions."

But it said it changed the outlook to negative because of "the moderately higher degree of business risk as well as weak demand visibility for many products."

S&P raises Pentacon

Standard & Poor's said it upgraded Pentacon Inc.'s ratings after it made a missed interest payment within the grace period. The rating agency put the ratings on CreditWatch with negative implications.

S&P commented: "The CreditWatch listing reflects continuing uncertainty regarding the company's ability to meet its future debt service obligations."

S&P changes Playtex Products outlook to negative

Standard & Poor's changes its outlook on Playtex Products Inc. to negative from stable. It confirmed the BB- corporate credit and senior secured bank loan ratings and B subordinated debt ratings.

S&P said it revised the outlook because of Playtex's "weakened operating and financial performance, which is below Standard & Poor's earlier expectations for 2001. In addition, competitive industry conditions and the challenging retail environment are expected to further impact the company's results over the near term."

It noted credit measures are weak for the rating. For the trailing 12 months ended Sept. 30, 2001, EBITDA coverage of interest expense was about 1.9 times, while debt to EBITDA (adjusted for the accounts receivable securitization) was 5.2x. S&P said it anticipates that coverage ratios will remain weak over the near term as a result of Playtex's high debt leverage and difficult industry fundamentals in many of the company's categories.

S&P raises UbiquiTel outlook to positive

Standard & Poor's revised its outlook on Sprint PCS affiliate UbiquiTel Inc. and unit UbiquiTel Operating Co. to positive from stable. It confirmed its B- corporate credit ratings on UbiquiTel and UbiquiTel Operating Co. and its B- senior secured bank loan and CCC subordinated debt ratings on UbiquiTel Operating Co.

The rating agency said the revision is based on "the successful completion of UbiquiTel's initial network buildout, improvement in operating and financial metrics, and completion of the Via Wireless acquisition."

It noted completion of the initial network buildout covering about 63% of the service area in the third quarter of 2001 was ahead of S&P's expectations.

The rating agency commented: "Subscriber count also posted strong growth in the period, ending the third quarter at 132,000, including 57,000 customers from Via Wireless."

S&P puts Day International on negative watch

Standard & Poor's put Day International Group Inc. on CreditWatch with negative implications. Ratings affected include the company's senior unsecured debt at B, its subordinated debt at B- and its preferred stock at CCC+.

S&P said the placement on CreditWatch reflects Day International's "weaker-than-expected operating performance, limited liquidity, and very restrictive bank covenants resulting in heightened financial risk."

It added: "The continued slowing in the U.S. economy increases the likelihood of Day International violating its bank covenant requirements for the fiscal third quarter ended Sept. 30, 2001. The company is currently working with its senior lenders to obtain a waiver or modifications of such covenants for the third quarter and for future periods."

Moody's downgrades Haynes International's 11 5/8% seniors

Moody's Investors Service lowered Haynes International Inc.'s ratings including its $140 million of 11 5/8% senior notes due 2004 to Caa2 from Caa1. The outlook remains negative.

"The rating downgrades are in response to the projected significant drop in the new jet engine builds and reduced requirements for spare and replacement parts following the major drop in air travel in the wake of the September 11 terrorist attack and expectation for continued reduced levels for the intermediate term," Moody's stated.

The Caa2 rating on the 11 5/8% senior notes reflect their effective subordination to a $72 million senior secured bank revolving credit facility, the release added.

Haynes International, Inc. is headquartered in Kokomo, Ind.

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