Fitch ups CenterPoint outlook

Fitch Ratings affirmed the ratings of CenterPoint Energy Inc., including the convertible preferred securities at BBB-, and subsidiaries and upgraded the outlook to stable from negative.

The rating action is supported by progress in recent weeks toward restoring liquidity and eliminating near-term debt refinancing risk.

In addition, the financial condition of the former subsidiary Reliant Resources Inc. (CCC+ senior unsecured debt) has stabilized following the successful conclusion of a $6.2 billion global bank refinancing package on March 31.

This was an important consideration in the rating analysis for CenterPoint, as Reliant has agreed to indemnify the former parent for any potential damages emanating from various lawsuits and investigations related to the business activities of Reliant, including the California situation.

S&P upgrades Dixie Group

Standard & Poor's upgraded The Dixie Group Inc. including raising its $50 million 7% convertible subordinated debentures due 2012 to B- from CCC. The outlook is stable.

S&P said the upgrade reflects Dixie's improved operating performance and the related improvement in credit protection measures.

In addition, in March 2003 the company made the final $50 million payment on its acquisition of Fabrica International Inc., substantially alleviating S&P's near-term liquidity concerns.

The ratings on the Dixie Group reflect the challenging operating environment in most of its business units and weak industry fundamentals characterized by a fragmented and intensely competitive and mature industry, S&P added. These factors are offset by the company's niche positions in the high-end residential and commercial carpet segments, as well as the factory-built housing market.

Despite a difficult operating environment, Dixie's operating results have improved during the past two years because of restructuring efforts undertaken since 2000, including the sale of non-core assets and significant reductions in workforce, debt, and inventory levels.

As a result, credit protection measures for the year ended Dec. 28, 2002, continued to improve, with EBITDA to interest coverage of 2.8x and total debt to EBITDA of about 4.2x, which was down from more than 9x at the end of 2000, S&P said. The rating agency expects credit protection measures to remain in this range in the intermediate term.

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