Moody's Investors Service lowered the rating of FleetPride Inc.'s $149 million senior secured bank facilities to B3 from B1 due to continued poor operating performance. Sales in the first three months of 2001 decreased by about 11% to $122 million and operating income decreased by more than 70% to $2 million as operating margin for the period showed significant reduction. FleetPride, headquartered in Deerfield, Ill., is the nation's largest independent aftermarket distributor of heavy-duty truck and trailer parts. However, the ratings also recognizes the strong equity sponsorship and support, and the market leading position of the company.
* Moody's downgraded Millennium Chemicals' $300 million of senior secured credit facilities to Ba1 from Baa3. The rating reflects the company's high levels of debt during a period of softening markets for titanium dioxide products. Headquartered in Red Bank, NJ, Millenium is a major international chemical company with leading market positions in titanium dioxide pigments, industrial chemicals, performance chemicals, and specialty chemicals.
The downgrade also reflects the structural subordination of Millennium's senior unsecured bonds to the new $300 million bank financing, expected to be completed shortly.
* The ratings on Rent-A-Center's $645 million of senior secured credit facilities were upgraded to Ba2 from Ba3 due to significant debt reduction. Moody's notes that Rent-A-Center reduced its debt by $184 million since the end of 1999. The Plano, Texas-based company is the largest rent-to-own operator in the U.S. with an approximate 27% market share based on store count.
The ratings also reflect the company's improving revenue. For the first three months of this year, revenues increased by 12% to $439.7 from $392.5 million, primarily attributable to an increase in customers and broader merchandise offered for rent. Prices also increased in the first quarter. However, the rating also factors in some remaining litigation.
* Moody's downgraded 360networks Inc.'s senior unsecured rating to Caa3 from B3 and its senior secured and senior implied ratings to Caa2 to B1. All ratings remain on review for possible further downgrade. Approximately $2.5 billion in debt is affected. The action follows the company's recently announced revised guidance and reflects Moody's concern about absent additional funding that may cause the company's liquidity position to be insufficient to support its operations. 360networks is based in Vancouver, Canada. In its latest announcement, 360 lowered its estimate of 2001 cash revenues to $1.2 to $1.4 billion, down from $2.4 to $2.6 billion and adjusted its EBITDA to $750 to $800 million from $1.8 to $1.9 billion previously.