Steel Dynamics Upgraded; KoSa Under Review

Steel Dynamics plans to offer a $100 million add-on of its 9 1 / 2 % senior unsecured notes maturing in 2009. A portion of the proceeds from the offering will repay part of the senior secured term credit facility and finance capital expenditures. Moody's Investors Service assigned a B1 rating to the add-on notes and raised the rating on the existing $200 million of 9 1 / 2 % notes one notch to B1. In addition, Moody's has upgraded ratings for the company's $238 million credit facility from Ba3 to Ba2. The facility consists of a $163 million "B" loan due 2008 and $75 million revolver maturing in 2007.

The upgrade reflects the company's relatively strong financial performance over what has been a difficult period for the steel industry. While there is some cyclicality to pricing in the steel industry, Steel Dynamics has operated well over last three years regardless of economic environment, a Steel Dynamics spokesman said. In respect to the possible removal of steel tariffs, the spokesman said the concern is further down the road. A number of factors, including the lower value of the dollar and demand for steel in other parts of the world, make it less attractive for those who have exported steel into the U.S. to do so now, he also commented.

The outlook is stable, reflecting the company's increasing diversity, solid operating cash flow, adequate liquidity and profitable flat-roll operations. As of Sept. 30, the company's debt-to-EBITDA was 2.8 times. The revolver was unused as of Sept. 30.

* Koch Industries ' KoSa B.V. has reached a definitive agreement for the $4.4 billion cash purchase of INVISITA , formerly known as DuPont Textiles & Interiors , from E.I. Du Pont De Nemours & Co. Koch plans to combine KoSa with INVISITA, with the transaction expected to close during the first half of 2004. KoSa expects to refinance its debt as part of the transaction, Moody's said. Announcement of the planned acquisition has led the ratings agency to place KoSa's under review for possible downgrade.

The company has a $200 million revolver, $247 million "A" loan and $222 million "B" loan, all rated Ba3 by Moody's. The revolver and "A" loan mature in 2004, while the "B" loan is due in 2006. The review will examine the impact of the transaction on KoSa's operations, the proposed capital structure and KoSa's strategic fit within the organization as well as INVISTA's operating performance, the competitive landscape and the market share of the combined businesses. KoSa, a producer of polyester products, generated revenues of $2.38 billion for the LTM ended Sept. 30. Calls to Scott Huckins , KoSa's cfo, were not returned.