S&P confirms Champion, off watch

Standard & Poor's confirmed Champion Enterprises Inc. including its $200 million 7.625% unsecured notes due 2009 at B- and Champion Home Builders Co.'s $150 million 11.25% senior unsecured notes due 2007 at B- and removed the ratings from CreditWatch negative. The outlook is negative.

S&P put the company on watch on July 8 following the announcement of senior management changes and consequent uncertainty regarding the company's strategic direction.

The removal from CreditWatch follows the recent announcement that Champion will exit its capital-intensive and unprofitable consumer lending business, S&P said.

The current ratings are supported by the company's substantial cash balances and limited near-term refinancing needs.

Moody's cuts Vendex to junk

Moody's Investors Service downgraded Royal Vendex KBB to junk, cutting its long-term rating to Ba1 from Baa3. The outlook is stable.

Moody's said the downgrade concludes a review begun in July after VendexKBB's announcement that operating losses at its Vroom and Dreesman subsidiary were likely to exceed earlier expectations.

Moody's added that the increased level of losses at V&D and the relatively weak liquidity assurance afforded by VendexKBB's current liquidity arrangements render the company's consolidated debt protection measures incompatible with its former rating category.

Nonetheless, the rating agency added, the company continues to display some of the characteristics of an investment-grade credit, such as its strong market positions and its business diversification.

Also Moody's noted that a number of other formats (such as DIY and fashion) have shown good operating performance. Hence a sustained period of improved performance at V&D, together with continued successful execution of its strategy at the other group businesses, could result in positive pressure on the rating in due course.

Moody's cuts UFJ, Mizuho, Sumitomo preferreds

Moody's Investors Service downgraded the preferred stock and securities issued by financing subsidiaries of Mizuho Corporate Bank Ltd., Sumitomo Mitsui Banking Corp. and UFJ Bank Ltd. Moody's cuts TB Finance (Cayman) Ltd.'s preferred stock and Sanwa International Finance (Bermuda) Trust's preferred stock to Ba2 from Ba1, UFJ Bank Ltd.'s Tier III securities to Ba1 from Baa2 and Mizuho JGB Investment LLC's preferred stock, Mizuho Preferred Capital Co. LLC's preferred stock, SB Treasury Co. LLC's preferred stock and Tokai Preferred Capital Co. LLC's preferred stock to Baa3 from Baa2.

The long- and short-term deposit ratings, senior unsecured debt ratings, senior and junior subordinated debt ratings and bank financial strength ratings of these banks were not affected.

Moody's said the downgrades reflect its view that risk of payment suspension on those Tier I preferred instruments have increased in view of weak fundamentals of those banks evident in their E bank financial strength ratings, the evolving accounting regime and the lack of progress in regulatory support mechanism such as the creation of pre-emptive capital injection scheme for banks.

Moody's added that it expects that increasingly stringent evaluation of deferred tax assets tangibility of those banks by auditors would add another element of uncertainty to fragile core capital structure of those banks, given their very high reliance on deferred tax assets in their regulatory capital. In Moody's view, such a capital structure is very unusual for large sized globally operated banking institutions, which may require a credible scenario to redress this situation in a timely manner to reduce the uncertainty.

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