Moody’s Downgrades Two; Upgrades Pepsi

  • 11 Feb 2001
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• Moody's Investors Service downgraded Generac Portable Products' $115 million in secured credit facilities to B3 from B1 because of the company's weak performance last year due to reduced demand for generators. This is due to record demand in 1999, caused by severe weather activity in addition to consumer concerns about possible Y2K power outages and higher-than-normal generator inventory levels at retail locations in 2000. Because Generac was operating under tight credit measurements as a result of its 1998 recapitalization, there was little cushion to absorb lower results. Regarding 2001 projections, generator sales are expected to improve now that a good portion of 2000 excess inventory has been worked down.

• Moody's upgraded the revolving credit facility of The Pepsi Bottling Group (PBG) from A3 to Baa1 because of substantially improved operating performance. PBG is ahead of its projections for sales, growth, earnings and cash flow. The company's operating margins and coverage ratios have steadily risen, the rating notes. PGB has also had strong growth in non-carbonated beverages, especially bottled water, and stands to benefit from some of the new brands that will become available through the recent acquisitions by PepsiCo. However, the company continues to face challenges of further acquiring domestic and international franchise territories, according to the rating. Calls to Lionel Nowell, cfo, were referred to a spokeswoman who did not return them by press time.

• Standard & Poor's lowered its rating on Hercules Inc.'s bank loan to BB from BB+ following the company's announcement that it has ended discussions related to the sale of the majority of the Resins Division and its FiberVisions unit. Additionally, Hercules announced that its profit from operations for the fourth quarter of 2000 would decline to the $68-72 million range due to ongoing weakness in the euro and recent softness in key end markets including paper, paint, construction and steel. However, the rating notes that Hercules would be considered for an upgrade if a stronger company were to acquire it.

• Bethlehem Steel Corporation's secured credit was nudged down to B2 from Ba3 by Moody's because of concerns about deteriorating steel market conditions and the impact on operating performance and debt protection measurements. The downgrade also considers the limited potential for a near-term recovery in steel prices and the prospect that, with the continuation of current performance trends, the company could be challenged to remain in compliance with bank loan covenants over the coming quarters. However, the rating notes that the company continues to address these issues through cost reduction programs and by curtailing capital expenditures. Calls to Gary Millenbruch, cfo, were referred to a spokeswoman, who did not return them.

  • 11 Feb 2001

GlobalCapital European securitization league table

Rank Lead Manager/Arranger Total Volume $m No. of Deals Share % by Volume
1 Bank of America Merrill Lynch (BAML) 7,026 25 11.95
2 Citi 6,449 21 10.96
3 BNP Paribas 5,093 18 8.66
4 Barclays 4,040 11 6.87
5 Lloyds Bank 3,615 14 6.15

Bookrunners of Global Structured Finance

Rank Lead Manager Amount $m No of issues Share %
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  • Today
1 Citi 2,384.00 8 11.97%
2 JPMorgan 1,441.26 6 7.24%
3 Bank of America Merrill Lynch 1,369.03 6 6.87%
4 Mizuho 1,358.38 4 6.82%
5 SG Corporate & Investment Banking 1,292.64 1 6.49%