Moody's downgrades Kaiser Aluminum, puts Maxxam on review

Moody's Investors Service downgraded Kaiser Aluminum & Chemical Corp. and Kaiser Aluminum Corp. The outlook is negative. Moody's also put Maxxam Group Holdings Inc.' guaranteed senior secured notes on review for possible downgrade. Ratings affected include: Kaiser Aluminum & Chemical's $174 million of 9.875% senior notes due 2002 and $225 million of 10.875% senior notes due 2006, both lowered to Caa2 from B3; Kaiser Aluminum & Chemical's $400 million of 12.75% senior subordinated notes due 2003, lowered to Ca from Caa2; and Maxxam Group's $88 million of 12% guaranteed senior secured notes due 2003 at Caa1 on review.

Moody's said it already downgraded Kaiser and put it on review for further downgrade in October 2001, primarily due to poor aluminum fundamentals and uncertainties about its debt refinancing plans and asbestos liabilities.

The rating agency added that on Jan. 15, Kaiser announced it intended to begin discussions with noteholders regarding potential debt restructuring.

"To the best of our knowledge, these meetings have not occurred and none are currently scheduled, and there has been no additional information from the company regarding its refinancing options," Moody's said.

S&P rates new Hanger Orthopedic notes B-

Standard & Poor's assigned a B- rating to Hanger Orthopedic Group Inc.'s planned offering of $200 million senior notes due 2009 and a B+ rating to Hanger's proposed $75 million senior secured credit facility due 2007. S&P also confirmed Hanger's corporate credit rating at B and its subordinated debt at CCC+. The outlook is positive.

S&P said its low speculative-grade rating on Hanger reflects the company's "challenge to capitalize on its leading health care niche position, while burdened with substantial acquisition-related borrowing."

"Lackluster" results in 2000 reflected integration issues and practitioner defections after a large acquisition, S&P said. "However, it now appears that the implementation of a strategic plan by a new management team has tightened working capital management and reduced operating costs."

S&P rates Saks bank loan BB+

Standard & Poor's assigned a BB+ rating to Saks Inc.'s $700 million senior secured bank credit facility due November 2006 and confirmed Saks' ratings, including its senior unsecured debt at BB. The outlook is negative.

S&P said it is "reasonably confident" bank lenders will recover 100% of principal if a default were to occur based on the facility's "good collateral coverage, conservative advance rates, tight structure, and Standard & Poor's belief that Saks' collateral is of high quality."

However S&P said Saks has performed poorly for some time compared to its peers, despite its good presence in the department store sector through a variety of traditional stores and its upscale Saks Fifth Avenue chain.

"Standard & Poor's believes the company's ability to recover sales and market share may be very difficult to achieve given the weak economy and an intense competitive environment," the rating agency said.

S&P rates Solectron notes BB+

Standard & Poor's assigned a BB+ rating to Solectron Corp.'s planned offering of $500 million senior unsecured notes due 2009 and confirmed its existing ratings on the company including its senior secured and senior unsecured debt at BB+. The outlook is negative.

S&P said its ratings "are based on weak operating performance, exposure to depressed communications equipment end markets, and leveraged financial profile."

Solectron's "top-tier" position in electronic manufacturing services, well-established customer relationships and favorable long-term trends towards outsourcing only partially offset the negatives.

Moody's rates Meow Mix loan Ba3

Moody's Investors Service assigned a Ba3 rating to The Meow Mix Co.'s $130 million credit facilities. The outlook is stable.

Proceeds from the $30 million six-year senior secured revolving credit facility and the $100 million six-year term loan will be used to fund the acquisition by J.W. Childs and management of Meow Mix's two brands - Meow Mix and Alley Cat - from Nestle Holdings, Inc. and to provide working capital.

Moody's said Meow Mix's ratings are restrained by "the company's start-up as a stand-alone entity without a track record that would indicate its future direction and definition; the potential for further leverage if an acquisition growth strategy is pursued; and customer concentrations, particularly with WalMart."

The company also has "nominal" tangible assets, a modest revenue base of $200 million and has a concentration in a single brand and product. It competes with larger more diversified companies such as Procter and Gamble, Nestle, Heinz and Mars, Moody's added.

S&P downgrades Asia Global Crossing

Standard & Poor's downgraded Asia Global Crossing Ltd., including cutting its $408 million 13.375% senior notes due 2010 to C from CCC-. The ratings remain on CreditWatch with negative implications.

S&P cuts Hanover Compressor outlook

Standard & Poor's lowered its outlook on Hanover Compressor Co. to negative from stable. The company has a BB+ corporate credit rating from S&P.

S&P raises Alliance Gaming outlook

Standard & Poor's raised its outlook on Alliance Gaming Corp. to positive from stable. The company has a B+ corporate credit rating.

Moody's confirms Bauang Power

Moody's Investors Service confirmed Bauang Private Power Corp. of the Philippines at Ba1.

The rating agency said it does not expect recent technical problems at its power plant to have a material negative impact on Bauang's near term cash flow and debt servicing capability.

However Moody's cautioned that repeated mechanical failure could pose potential uncertainty to project revenue and pressure Bauang's rating.

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