Moody's downgrades Penton notes to B3, outlook negative

Moody's Investors Service said it downgraded Penton Media, Inc.'s ratings, affecting $557 million of debt. Included in the reduction are $372 million of bank credit facilities, lowered to B1 from Ba3 and $185 million of senior subordinated notes due 2011, cut to B3 from B2. The outlook is negative.

Moody's said the action reflects Penton's "disappointing operating performance relative to company projections, and the likelihood that the company will not be in a position to improve operations in the near-term." The Sept. 11 terrorist attacks, the US response and the deteriorating economy are expected to hurt Penton's operating performance further, the rating agency said.

Penton has been particularly weak in its internet/broadband products and more recently in the entire technology sector, with these sectors between them accounting for 75% of the company's revenues, Moody's said.

Moody's also noted Penton is seeking to modify its bank facility covenants, with particular concern it may not meet the total leverage covenant of a five times debt to EBITDA ratio.

Moody's downgrades Advanstar sr sub notes to B3, outlook negative

Moody's Investors Service downgraded its ratings on Advanstar Communications, affecting $600 million of debt. Among the ratings lowered are Advanstar's $450 million of bank credit facilities, cut to B1 from Ba3 and its $150 million senior subordinated notes due 2011, reduced to B3 from B2. The outlook is negative.

Moody's said the ratings reflect "the effect of the increasingly weak advertising sector on Advanstar's trade publications as well as the likely deterioration in the performance of its trade show businesses as a result of the September 11th terrorist attacks, the expected US response and the consequent deterioration in the economy."

The rating agency added: "Advanstar's challenges are aggravated by its high financial leverage, and weak cash flow following interest expense and capital expenditures."

Moody's changes outlook for Dillard's Inc. to negative

Citing continued softness in Dillards, Inc.'s profitability and comparable store sales, Moody's changed the company's ratings from stable to negative, on Monday. According to the report, approximately $4.4 billion in bebt and bank agreements are affected.

The report pointed to decreasing customer acceptance of Dillard's Every Day Low Pricing in a more promotional retail environment, and more intense competition in apparel from discounters, and added that Dillard's performance in fiscal 2001 may not meet Moody's expectations, even if consumer confidence rebounds quickly from the Sept. 11th terrorist attacks.

Moody's reported the following ratings in Monday's outlook change:

--Dillard's, Inc.: senior implied, senior unsecured bonds, debentures, notes, reset put securities, bank credit agreement and issuer rating (Ba1); subordinated debentures (Ba2).

--Mercantile Stores Company, Inc.: senior unsecured notes and debentures ( Ba1).

--Dillard's Capital Trust I: capital securities (Ba2).

Moody's rates Land O'Lakes bank facility Ba2, downgrades trust pfds

Moody's Investors Service said it rated Land O'Lakes' new senior secured bank credit facility at Ba2 and downgraded the company's existing $250 million bank facilities to Ba3 from Ba2 and its trust preferred securities to Ba3 from Ba1. The outlook is stable. The actions affect about $1.1 billion of debt securities.

Moody's said the actions reflect Land O'Lakes pending acquisition of Purina Mills, Inc. for $243 million in cash and $120 million in assumed Purina Mills debt. The rating agency said the purchase will create "significantly higher debt and weaker debt protection." Pro-forma senior debt will be 3.8 times EBITDA and total debt (including trust preferreds) to 4.4 times EBITDA.

It added that the transaction comes at a difficult time because Land O'Lakes debt protection measures were already strained due to higher debt from acquisitions and investments in recent years, as well as weaker earnings because several of its agricultural related businesses faced cyclical downturns such as fertilizer. It noted, however, that the company has a strong bank presence, that its cooperative structure helps financial flexibility and that Purina Mills is a "good strategic fit" with its existing business.

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