Moody's lowers BMAC's ratings

Moody's Investors Service downgraded the ratings for Better Minerals & Aggregates Co., including the $150 million of 13% senior subordinated notes due 2009 to Caa3 from Caa2 and the senior secured credit facility, which includes a $50 million revolver, a $21.5 million term loan A due 2005 and an $89 million term loan B due 2007, to B3 from B2. The rating outlook remains negative.

The rating action considers the smaller scale of BMAC's operations following the planned sale of its aggregates business and anticipated tight interest coverage ratios despite repayment of nearly half its outstanding debt. The company plans to complete the sale of its aggregates business to a subsidiary of Hanson Building Materials America, Inc. by the end of July 2003 and intends to use the net proceeds toward repayment of most of its bank debt. This will reduce BMAC's outstanding debt to approximately $160 million, comprising primarily the high coupon senior subordinated notes.

The negative outlook reflects the continuing operating, business and liquidity challenges for the company.

S&P affirms The Sports Club at CCC

Standard & Poor's affirmed its CCC corporate credit rating on The Sports Club Co Inc., based on improvement in membership enrollment and liquidity. In addition, the ratings were removed from CreditWatch, where they were placed with negative implications. The outlook is negative.

"The rating action reflects Sport Club's improvement in membership enrollment and liquidity," said credit analyst Andy Liu.

On a year-over-year basis, total memberships grew by 8.4%, with most of the increase coming from its five most recently opened clubs. The company's financial risk remains high with strained liquidity, high debt leverage and significant discretionary cash flow deficits.

The issuance of a $20 million note enabled the company to retire its revolver and prepare for its September interest payment. It is unclear how the company will meet its ongoing debt service, absence a dramatic improvement in cash flow. Also, the absence of a committed credit facility reduces Sports Club operating cushion in an uncertain economic environment, S& P said.

Fitch takes Nash Finch off Watch Negative

Fitch Ratings removed Nash Finch from Rating Watch Negative following the company's filing of its financial statements for the third and fourth quarter of fiscal year 2002. In addition, the senior secured bank credit facility rating of B+ and the subordinated notes rating of B- were affirmed. The rating outlook is negative.

The ratings were initially placed on Rating Watch Negative following the company's announcement that it was under an informal inquiry by the SEC for practices related to Count-Recount and was postponing the release of its third quarter earnings. Subsequently, the company delayed filing financial statements for the third and fourth quarters of fiscal 2002. The dispute as to how to account for the count-recount issue has now been resolved and the SEC's Office of the Chief Accountant has approved of the company's accounting for this issue at this time which allowed the company to file its delinquent financial statements in May of 2003. However, the SEC investigation is still open.

Ratings reflect the company's highly competitive operating environment and the low margined nature of its food wholesale and retail businesses.

Offsetting these negatives is the company's stable credit profile and its ability to grow its business as the dynamics of the industry change as well as its select opportunities to build its business through niche offerings such as its Avanza stores.

The outlook reflects weak sales trends in the company's retail business.

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