S&P keeps Resource America on watch

Standard & Poor's said Resource America Inc. remains on CreditWatch with negative implications including its senior unsecured debt at B-.

S&P said the action follows the announcement that Resource America has entered into a letter of intent with WestWind Capital Partners LP for the recapitalization of Resource America's loan position in the Evening Star Building in Washington, D.C.

Resource America will receive $30 million under the agreement, some of which would be targeted for debt repayment in its real estate division, on top of an expected $18 million cash net of investor liabilities on the balance sheet as of March 31, 2003.

However, the proceeds are not enough to compensate for the current credit risk recognized by Resource America's negative CreditWatch listing, reflecting concern about the company's ability to refinance its $65 million of unsecured notes maturing in 2004, S&P said.

Fitch confirms Midland Cogeneration, off watch

Fitch Ratings confirmed Midland Cogeneration Venture LP's $567 million lease obligation bonds at BB and removed them from Rating Watch Negative.

Fitch said the action follows the removal of the Rating Watch Negative from the ratings of Consumers Energy Co., Midland Cogeneration's principal offtaker. Consumers' senior unsecured debt is rated BB and the outlook for Consumers is stable.

Absent counterparty credit concerns, Fitch views the Midland Cogeneration bonds as having characteristics consistent with low investment grade quality.

S&P confirms Edison Mission Energy Funding

Standard & Poor's confirmed Edison Mission Energy Funding Corp.'s $236.7 million of senior unsecured bonds, series A due 2003 and B due 2008 at BB. The outlook is developing.

The power projects that make up Edison Mission Energy Funding performed well during 2002 and allowed it to achieve a debt service coverage ratio of 2.09x with funds from operations (4.94x including payment of past due receivables), S&P said.

Despite credit strength improvements at power offtaker, Southern California Edison (BB/developing), the continuing regulatory and political uncertainties dominate the credit profile for Southern California Edison, S&P said. Until the regulatory situation provides a stronger indication that Southern California Edison is not at risk of a situation that could put it into bankruptcy, as was nearly the case in 2001, the rating on Southern California Edison, and by consequence the rating on Edison Mission Energy Funding, will remain at BB with a developing outlook.

S&P cuts Philippine corporations

Standard & Poor's downgraded some Philippine corporations after downgrading the country's sovereign rating to BB with a stable outlook.

Ratings lowered include National Power Corp.'s $300 million 9.625% guaranteed notes due 2028, $360 million guaranteed bonds due 2016, ¥12 billion bank loan due 2009, ¥13.54 billion bank loan due 2004, ¥48 billion bank loan due 2009, ¥50 billion bank loan due 2010 and ¥8.47 billion bank loan due 2003 to BB from BB+. The outlook on National Power is stable.

Also lowered was Bauang Private Power Corp.'s $85 million 10.17% senior secured notes due 2008, cut to BB with a stable outlook from BB+, and CE Casecnan Water and Energy Co. Inc.'s $125 million 11.45% senior secured notes series A due 2005 and $171.5 million 11.95% senior secured notes series B due 2010, cut to BB with a stable outlook from BB+.

S&P also lowered its outlook on Globe Telecom Inc.'s foreign currency rating of BB to stable from positive, in line with the sovereign.

S&P said the rating change on the sovereign reflects the government's growing debt burden and fiscal rigidity. The stable outlook reflects S&P's expectation that the Philippine government will slowly stabilize the erosion of public finances witnessed over the past few years.

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