Moody's upgrades Calpine to investment grade

Moody's Investors Service upgraded the senior unsecured debt of Calpine Corp. and its affiliates to Baa3 from Ba1. Approximately $9 billion of debt and preferred securities are affected by the upgrade, according to the news release, which added that Moody's outlook for Calpine, is stable.

Among other factors, Moody's cited Calpine's "very strong, broad and deep management," as well as the company's "focused growth, vertical integration and operational commoditization strategies," in the ratings upgrade.

The Moody's upgrade affects the following Calpine securities:

--Calpine Corporation senior unsecured debt to Baa3 from Ba1;

--Calpine Canada Energy Finance ULC senior unsecured debt to Baa3 from Ba1.

--Tiverton Power Associates Limited Partnership and Rumford Power Associates Limited Partnership pass through certificates to Baa3 from Ba1.

--Calpine Capital Trust, Calpine Capital Trust II and Calpine Capital Trust III convertible preferred securities to Ba1 from Ba2.

Moody's also assigned ratings to the following new securities:

--Calpine Corporation US$267 million senior unsecured notes (Baa3).

--Calpine Canada Energy Finance ULC C$250 million senior unsecured notes (Baa3).

--Calpine Canada Energy Finance II ULC £275 million senior unsecured notes (Baa3).

--South Point Energy Center, LLC, Broad River Energy LLC and RockGen Energy LLC US$654.5 million pass through certificates (Baa3).

San Jose, Calif.-based Calpine develops, owns and operates highly efficient, natural gas-fired and renewable geothermal electric generating facilities, according to the release.

Fitch Rates Calpine's $2 bln debt BBB-

Fitch assigned Calpine Corp.'s $2 billion proposed senior secured notes a rating of BBB-. Calpine's outstanding parity debt is affirmed at BBB-, according to the rating agency.

"The investment-grade rating reflects the company's record of consistently meeting its financial and operating targets, the competitive operating profile of its generating assets, a proactive management team and a flexible financing strategy that takes advantage of opportunities in both the debt and equity markets," Fitch stated.

Moody's downgrades Bethlehem Steel notes to Caa3 from Caa1

Moody's Investors Service said it lowered the senior unsecured notes and debentures of Bethlehem Steel Corp. to Caa3 from Caa1 and assigned a B2 rating to the company's proposed $750 million senior secured credit facility comprised of a $650 million revolver due 2004 and a $100 million tranche B facility, due 2004. Bethelehem Steel's preferred stock is cut to C from Ca. The outlook on all the ratings is negative. Approximately $1.1 billion of debt securities is affected.

Moody's said it took the action because it believes the slowing U.S. economy and continuing weakness in industrial production is likely to persist over the intermediate term, problems that have "significantly impacted the company's profitability and liquidity."

The rating agency added: "Announced reductions in production in the auto industry and the resulting excess of inventories at distributors, combined with higher energy costs are expected to continue to pressure Bethlehem Steel's operating cash flow, weakening its debt protection measurements. Recognizing the company's non-cash pension and healthcare expenses, cash flow generation may be pressured in the intermediate term due to increases in working capital needs should production volumes improve."

Moody's downgrades United Pan-Europe sr unsec notes to Caa3

Moody's Investors Service lowered the debt ratings for United Pan-Europe Communications and its subsidiaries. UPC's senior unsecured notes dropped to Caa3 from Caa1 and its subsidiary bank debt to B2 from B1. Concurrently, Moody's downgraded the Caa1 senior unsecured bond rating of UPC's Polish subsidiary, UPC Polska, to Caa2. UPC's senior implied and senior unsecured issuer ratings are Caa1 and Caa3, respectively, according to the report, which added that all ratings have been placed under review

for possible further downgrade.

In its report Moody's cited disadvantageous developments likely to impact the company's capital structure, set in train by UPC's fallen stock price.

"Moody's now believes that some form of restructuring is a strong possibility and expects that bondholders are likely to realise considerable losses given their increased subordination to a growing senior bank facility," the report stated.

UPC is a leading provider of broadband communication services, headquartered in Amsterdam, The Netherlands.

Moody's cuts UnitedGlobalCom

Moody's Investors Service lowered the debt and preferred stock ratings of UnitedGlobalCom and its subsidiaries, and placed the ratings under review for possible further downgrade. Lowered were UnitedGlobalCom's $1.375 billion (face amount) of 10.75% senior secured discount notes due 2008 to to Caa3 from Caa1, the $355 million (face amount) of 10.875% senior unsecured discount notes due 2009 to Ca from Caa2, $425 million of 7% Series C preferred stock and $287.5 million of 7% Series D preferred stock to C from Ca. Moody's said the downgrades principally reflect the diminished credit profile of UGC's majority-owned subsidiary United Pan-Europe Communications (UPC), as reflected in Tuesday's rating downgrades of the debt for that entity and its subsidiaries cutting the senior implied rating to Caa1 from B2, which in turn has adversely impacted the credit quality of UGC given the historically strong correlation to and support of UPC from an asset valuation perspective towards UGC's ratings.

Moody's downgrades Dollar General to Ba1, still on downgrade review

Moody's Investors Service downgraded the long-term ratings of Dollar General Corp. to Ba1 from Baa2 and left them on review for further downgrade. Moody's said the action, which affects $200 million of debt securities, is a response to the on-going investigation of accounting irregularities at the company, including the decision to replace the existing external auditors before completion and release of audited financial results for fiscal 2000.

Moody's added: "Given the length of time that has passed without public resolution of these allegations, Moody's is concerned that the company's infrastructure and information systems have not kept pace with the rapid growth in revenue and in store locations and will present a challenge in the near term."

The rating agency said that infrastructure no longer appears to support an investment-grade rating.

However, Moody's noted "new financial management has joined the company and is attempting to resolve problems that it did not create. Additionally, Dollar General's strong franchise and solid cash flow generation continue to be credit positives and key rating factors."

S&P lowers CommScope

S&P lowered its corporate credit rating on CommScope Inc. to BB from BBB- and its convertible subordinated notes to B+ from BB+. At the same time S&P withdrew its existing BBB- bank loan rating and assigned a BB+ bank loan rating to the company's proposed $360 million senior secured credit facility. Ratings are removed from CreditWatch where they were placed on July 24, 2001, S&P stated.

The $360 million new credit facility consists of a $225 million 3 3/4-year senior secured term loan A, a $225 million 4 3/4-year senior secured term loan B and a $50 million 3 3/4-year senior secured revolving credit facility. The bank loan is secured by all tangible and intangible assets of CommScope Inc. and includes equity interest in its joint venture with Furukawa. There are restrictive covenants that prohibit further investments in the joint venture beyond $10 million.

The ratings action on the Hickory, N.C.-based coaxial cable company is based on a more leveraged financial profile and challenges associated with operating the new fiber optic cable business in an environment with uncertain demand, S&P stated.

Moody's upgrades $494 mln American Restaurant Group, Inc. debt

Moody's assigned a rating of B2 to American Restaurant Group Inc.'s $165 million senior secured notes as the ratings agency upgraded approximately $494 million of the company's debt securities.

Moody's also upgraded all other ratings of the company as follows:

--$142.6 million 11½% senior secured notes due 2003 to B2 from B3.

--$53.9 million 15% PIK preferred stock matures 2003 to Caa2 from Caa3.

--$132.1 million 14¼% senior discount debentures due 2005 issued by American Restaurant Group Holdings, Inc. to Ca from C.

--Senior implied rating to B2 from B3, and long term issuer rating to Caa1 from Caa2.

According to Moody's, the newly upgraded ratings consider the recent favorable performance of the Los Altos, Calif. restaurant company's operations, "with strong same store sales and improving restaurant margins, strong openings from recently constructed stores, our opinion that many favorable locations across the West remain to be developed, and the macroeconomic trend of increasing beef consumption."

Proceeds from the new issue will principally be used to refinance the senior secured notes due 2003; it is anticipated that the ratings on the 2003 notes will be withdrawn once this transaction is complete, the report stated, adding that the rating outlook is stable.

S&P revises J. Crew outlook to stable from positive, ratings affirmed

Standard & Poor's cited J. Crew Corp.'s deteriorating credit protection measures, as well as the company's weak operating results in the first half of 2001 in revising its outlook on the company to stable from positive.

S&P affirmed its CCC+ rating on J. Crew Corp.'s senior subordinated notes due 2007, and its C+ rating on J. Crew Group's senior discount debentures due 2008. In addition, the B corporate credit and bank loan ratings on J. Crew Corp., as well as the B corporate credit rating on J. Crew Group, were affirmed, according to the Tuesday release.

J. Crew, based in New York City, is a leading mail order and store retailer of women's and men's apparel, shoes, and accessories, according to the S&P release.

Moody's rates Ackerley bank debt Ba3, cuts sub debt to B3

Moody's Investors Service assigned a Ba3 rating to The Ackerley Group Inc.'s $120 million senior secured bank credit facilities and downgraded its $200 million senior subordinated notes due 2009 to B3 from B2. Moody's also placed Ackerley's ratings on review for further possible downgrade.

Moody's said the downgrade review reflects "the likelihood that the advertising market will remain weak for the foreseeable future, that local advertising may ultimately be affected by the economic slowdown, and that it will be challenging for management to correct operational missteps made by Ackerley over the near-term."

The rating agency said the previous ratings "had anticipated year-over-year declines in revenue and cash flow due to the weak advertising environment, but declines have been more severe and have occurred at a more rapid pace than previously expected. The difficult operating environment exacerbated by the Sept. 11th terrorist attacks and lack of commercial programming combined with Ackerley's low cash flow margins have constrained the company's cash flow and weakened its credit profile more broadly."

Moody's cuts Amkor Tech senior rating to B1, sub debt to B3, outlook negative

Moody's Investors Service lowered the debt ratings for Amkor Technology Inc.'s and revised the ratings outlook to negative on Tuesday. The $425 million 9.25% senior notes due 2006 and $500 million 9.25% senior notes due 2008 were cut to B1 from Ba3. The $200 million 10.5% senior subordinated notes due 2009, $259 million 5% convertible subordinated notes due 2007 and $250 million 5.75% convertible subordinated notes due 2006 were cut to B3 from B2. Moody's also lowered Amkor's $225 million guaranteed senior secured term loan and Amkor's $200 million guaranteed senior secured revolving credit facility, which is available but restricted to $130 million as of June 30 to Ba3 from Ba2. And, Moody's lowered the senior implied rating and senior unsecured issuer rating to B1 from Ba3. About $1.9 billion of debt was affected. Amkor's ratings could be lowered further if the company's liquidity deteriorates significantly, Moody's said.

Moody's puts Saks on review for downgrade, Proffitt's ratings

Moody's Investors Service placed the senior implied rating of Ba2 rating and other ratings of Saks Inc. on review for possible downgrade based on the potential deterioration in debt protection measures from weakened performance at Saks Fifth Avenue Enterprises following the attacks on the United States on Sept. 11, as well as the challenges that Saks faces in improving the operating performance of both businesses. Moody's review will focus on operational profitability over the near term, initiatives to boost sales and margins, especially at SFAE, and funding requirements and sources over the intermediate term. In separate actions, Moody's also put the Ba3 ratings of Proffitt's Capital Trust I, II, III, IV and V on review for possible downgrade.

Moody's revises Winn-Dixie outlook to negative

Moody's Investors Service changed the outlook for Winn-Dixie Stores Inc. on Tuesday to negative from stable based on increased uncertainty about the time required to achieve the full benefits of the company's restructuring initiatives. The senior implied Ba1 and senior unsecured Ba2 ratings, and others, were confirmed, reflecting Winn-Dixie's solid supermarket franchise and the recent completion of extensive strategic initiatives.

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