Nextel Is Wired; Steel Blank Manufacturer Looks Up

Nextel Communications has made progress in deleveraging its balance sheet and is anticipated to further improve its capital structure using free cash flow and opportunistic debt and equity issuance to refinance higher interest borrowings. Fitch Ratings has raised its credit rating for Nextel's senior unsecured notes to BB- from B+ and its senior secured bank facility to BB+ from BB. Fitch has also assigned a BB- rating to a $1 billion senior redeemable twelve-year note offering. The outlook is positive.

Fitch expects Nextel to strengthen credit protection measures in 2003 to three times debt-to-EBITDA or less, which exceeds original expectations of 3.4 times or less. The improvement in cash generation should lead to at least $600 million in positive free cash flow based on management's outlook for 2003, notes the rating agency. The positive outlook reflects Fitch's belief that Nextel will continue to improve credit metrics and that issues surrounding competitive push-to-talk challenges and wireless number portability will be resolved in a way that is not detrimental to Nextel's credit profile. Calls to a Nextel spokeswoman were not returned by press time.

* Stabilized operating results, improved liquidity and reduced debt has led Standard & Poor's to raise the bank loan ratings on Shiloh Industries' $260 million senior secured revolver to B from CCC+. The outlook is stable on the Cleveland-based manufacturer of steel blanks and stamped components for the auto industry. Softness in Shiloh's end-markets combined with challenges associated with facility expansions and start-up operations that overextended the company's resources led to eroded operating results and liquidity in mid-2001, notes S&P. But Shiloh has nearly accomplished a turnaround since 2002, when new management began to reduce the workforce, initiate operating efficiencies, eliminate unprofitable products and lower working capital requirements, S&P states. Calls to Stephen Graham, cfo of Shiloh, were not returned.