Moody's cuts Texas Petrochemicals

Moody's Investors Service downgraded Texas Petrochemicals LP including cutting its $175 million subordinated notes due 2006 and $50 million add-on series B senior subordinated notes due 2006 to Ca from Caa3.

Moody's said the action follows the company's Chapter 11 filing.

Texas Petrochemicals did not make the July 1 interest payment due on the senior subordinated notes. The company is currently in discussion with senior subordinated lenders regarding a restructuring of the company's debt.

Declining usage of MTBE as a gasoline additive in the U.S. combined with higher energy and raw material has pressured operating performance, Moody's said.

As of March 31, 2003, the company had $307 million of debt, including $97 million of senior secured debt. The ratings are based on estimates of potential recovery, and reflect Moody's belief that a recovery for noteholders will be significantly less than par.

Fitch cuts Petroleum Geo-Services

Fitch Ratings downgraded Petroleum Geo-Services' senior notes and trust preferred securities to D from C.

Fitch said the action follows the company's announcement that it has filed under Chapter 11 of the U.S. Bankruptcy Code.

The rating reflects the restructuring of the PGS Group's total debt to a sustainable level, from approximately $2.5 billion to approximately $1.3 billion. This will likely be achieved through conversion of the existing bank and bond debt into new debt and a majority of PGS's post-restructuring equity.

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