S&P cuts Enron synthetic notes to BBB- from BBB

Standard & Poor's on Tuesday lowered its ratings on five synthetic transactions that are tied to Enron Corp. to BBB- from BBB. Concurrently, the ratings remain on watch with negative implications. The lowered ratings reflect the Nov. 9 downgrade of Enron, which was prompted by the credit implications of the company's restatement of financial statements going back to 1997 due in part to a legal and accounting review of certain related-party transactions by a special committee of Enron's board of directors, S&P said. The synthetic issues use a credit default swap referencing Enron. Enron shares gained 74c to $9.98.

Fitch cuts Providian LT ratings to BB- from BB+

Fitch on Tuesday lowered Providian Financial Corp.'s long-term ratings to BB- from BB+ and affirmed the short-term ratings of B. The rating outlook for all ratings is negative, Fitch said, reflecting a more difficult operating environment for the company since posting disappointing results for third quarter and lowered forecasts for 2001. Rising credit losses and weaker than expected receivable growth in the company's core credit card business are both likely to persist over the intermediate term, Fitch said, and this has prompted the company to rethink its origination and risk management practices. Moreover, Fitch is concerned that Providian's weak operating performance could impact its ability to conduct financing transactions in the capital markets and thus pressure the company's liquidity. Although Fitch sees the company's liquidity profile as sound, reduced financing capacity in the capital markets over a protracted period will eventually strain Providian's liquidity unless financing alternatives are restored. Providian shares added 29c to $3.83.

Moody's cuts Allied Waste outlook to negative

Moody's Investors Service cut its outlook on Allied Waste North America, Inc., its parent, Allied Waste Industries, Inc., and its subsidiary, Browning-Ferris Industries, Inc., to negative from stable, affecting $11.5 billion of debt. Moody's rates Allied Waste North America's credit facility and senior secured notes at Ba3 and its subordinated notes at B2, Allied Waste Industries' convertible preferreds at B3 and Browning-Ferris' secured debentures and senior secured notes at Ba3.

Moody's said the negative outlook reflects "the potential for continued diminution in credit protection measures due to the company's high sensitivity to changes in operating margins vis à vis its competitors due to its high leverage."

The rating agency said Allied Waste has a "weak" balance sheet with goodwill comprising 60% of total assets and with debt amounting to 1.7 times last 12 months' revenues.

"Consequently, despite historically strong operating margins, the company has not generated meaningful free cash flow relative to its debt size. The downturn in the economy has negatively impacted Allied's operating margins, return on assets, and debt coverage. In addition, the company's sizable bank debt maturities over the intermediate term may give rise to refinancing pressure, particularly in the next couple of years. (The company is currently addressing this in part with a bond offering.) A further weakening of operating margins, cash generation or debt protection measurements could lead to a downgrade," Moody's added.

S&P raises Korea Tobacco & Ginseng

Standard & Poor's upgraded Korea Tobacco & Ginseng Corp. raising its convertible bonds due 2006 to BBB+ from BBB.

S&P raises Samsung

Standard & Poor's upgraded Samsung Electronics Co. Ltd., including raising its $150 million of 0.25% convertible bonds due 2006 and its $300 million of convertible bonds due 2007 to BBB+ from BBB.

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