Fitch cuts AMD

Fitch Ratings downgraded Advanced Micro Devices, Inc.'s senior unsecured rating to CCC+ from B- and assigned the same rating to its new $350 million convertible senior notes due 2007.

Incorporated into the ratings are semiconductor industry volatility, historic operating losses, rapid technological change, a possibly intensified price war and significant requirements for ongoing R&D and capital spending.

The outlook is negative, reflecting AMD's deteriorating credit protection measures and the expectation that cost improvements and revenue growth have to occur in the first half of 2003 or further rating action could be taken as leverage and interest coverage will remain weak for the rating category, Fitch said.

Moody's cuts Williams

Moody's Investors Service downgraded the ratings of The Williams Cos. Inc., including the mandatory convertible to Caa3 from B2, and subsidiaries.

The action reflects concern about sufficient cash flow from operations to meet ongoing obligations absent asset sales.

Williams continues to rely on asset sales to meet its large cash deficit and plans to sell at least $1 billion more than what has already been closed or announced.

Financial flexibility is being squeezed by much higher interest costs, acceleration of mandatory debt repayments and tightened covenants in new and amended bank and debt agreements. In some cases, interest costs rose 67% in the first nine months of 2002 from the year-ago period.

Moody's is uncertain whether Williams will continue to meet its various debt covenants.

The outlook is negative, reflecting considerable execution risk in the near-term, Moody's said.

Fitch cuts Loews

Fitch Ratings lowered Loews Corp. senior unsecured debt to A+ from AA- and subordinated debt to A from A+.

The downgrade reflects weak operating performance at CNA Financial Corp. and Lorillard Tobacco Co., which generate the majority of operating earnings and cash flows for Loews.

Ratings continue to be supported by substantial liquidity, backed by a $4.5 billion investment portfolio that exceeds its $2.5 billion debt, generally conservative financial practices and cash flow generative ability, Fitch said.

The outlook remains negative, reflecting uncertainty surrounding Lorillard's operating earnings and cash flows, which drive Loews' profitability.

S&P rates El Paso Energy Partners notes, lowers outlook

Standard & Poor's assigned a BB- rating to El Paso Energy Partners L.P.'s $150 million of senior subordinated notes due 2012.

The outlook was revised to stable from positive to reflect the growing confluence of the ratings with general partner EL Paso Corp., S&P said.

El Paso's 28% stake in the partnership influences its credit profile in several ways and effectively tethers the ratings of the two entities.

The partnership also plays an important role in El Paso's plan to deleverage its balance sheet plan by enabling it to transfer qualifying midstream assets to the partnership.

The outlook factors in greater uncertainties surrounding the credit profile. Further deterioration of El Paso's credit quality would likely exert pressure on the partnership rating irrespective of its stand-alone credit quality, S&P said.

Fitch confirms Newell

Fitch Ratings confirmed the ratings of Newell Rubbermaid Inc., including the $500 million of convertible preferreds at BBB, following its announcement to acquire American Saw & Manufacturing Co. for about $450 million. The outlook is stable.

Pro forma for the acquisition, total debt would have been about $2.9 billion at Sept. 30. Initially, credit statistics are expected to weaken, however a quick rebound is anticipated as American Saw operations are integrated.Raising some concern is Newell's pattern of debt-financed acquisitions which, if continued at sizeable levels, could pressure credit measures, Fitch said.

S&P confirms Newell

Standard & Poor's confirmed Newell Rubbermaid Inc.'s ratings, including the convertible at BBB- on the acquisition of American Saw & Manufacturing Co. The outlook remains stable.

The deal is expected to be financed with debt, which will somewhat weaken Newell Rubbermaid's financial profile. However, operating performance has recently benefited from new product introductions and cost-saving initiatives, S&P said.

Total debt to EBITDA should be about 2.6x in 2003, down from an estimated 3.0x in 2002, and funds from operations to lease adjusted debt should improve to 25% from about 20% in 2002.

Continued focus on working capital management is expected to augment ability to generate significant discretionary cash flow. That, coupled with substantial capacity under its bank facility, is expected to provide sufficient liquidity to meet future debt requirements and fund its $450 million accounts receivable financing, S&P said.

The receivables financing matures in 2008 but contains certain provisions, including a "ratings trigger," that could result in an earlier call date.

S&P upgrades Samsung Electronics

Standard & Poor's upgraded Samsung Electronics Co. Ltd. including raising its $150 million 0.25% convertible bonds due 2006 to A- from BBB. The outlook is stable.

S&P said the upgrade reflects Samsung Electronics' improved capital structure and strong commitment to maintaining a conservative financial profile.

The upgrade also reflects the company's strong ability to maintain solid profitability and cash flows through market cycles, S&P said.

Samsung Electronics has achieved a substantial improvement in its balance sheet over the past few years as a result of its steady debt reduction and increased liquidity, S&P noted. This improvement was made possible by the company's ability to generate solid profits and cash flows from core operations despite very harsh market conditions.

Samsung Electronics's ability to maintain solid cash flows and profitability, despite its high exposure to the cyclical electronic devices business, reflects its ability to achieve cost reductions, backed by its technological leadership in areas such as memory semiconductors and LCDs, S&P commented.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.