Moody's Investors Service upgraded Charles Rivers Laboratories' $190 million credit facility to Ba3 from B1 because the company has improved its credit profile. Charles River completed its $236 million initial public offering last June and repaid $205 million of debt. The company also cut leverage down to 2.4 times from 5.2 times between last year's first quarter and third quarter. Interest coverage has also risen to 3.3 times from 1.3 times during the same period. The agency believes, however, that debt reduction may halt significantly due to the company's acquisitive strategy. Charles River, based in Wilmington, Mass., is a commercial supplier of laboratory animals used in pharmaceutical testing. Union Bank of California leads the facility.
* Moody's downgraded Air Canada's $76 million credit facility to B1 from Ba3 because of weak debt protection measures in the face of soft earnings. The company's cost increases have risen since its Canadian Airlines acquisition. The agency also notes the cost increase is partially due to fuel cost increases. Staff upsizing and significant one-time costs associated with the merger have also taken a toll on earnings. Air Canada estimates nearly C$700 million per annum of integration synergies to date. Higher fuel costs have offset this. The company has also taken on additional debt after a C$1.1 billion stock buyback and the acquisition. As a result, adjusted debt to adjusted capital ratio is nearly 93% as of September 30 last year. Moody's asserts that the company will improve its situation after the Canadian Airlines' routes, staff and equipment are finalized. M. Robert Peterson, cfo of the airline company in Dorval, Quebec, did not return calls. Credit Lyonnais underwrote the loan.
* Moody's notched down Saks Incorporated's $1 billion credit facility to Ba1 from Baa3 after noting the company's department store group sales' have been soft. Sales of private label clothing did not meet expectations and failed to take up slack for soft sales of national name brands in the spring and summer. After auditing the store's merchandise, comparable store sales only tipped up 1% for the five weeks of December last year. Year-to-date comparable store sales are 2%. The rating also reflects Saks' low coverage and high adjusted leverage. Moody's acknowledges the department store has divested low-performing stores. Citigroup leads the facility, according to Capital DATA Loanware.
* Moody's upgraded Printpack Inc.'s $146.5 million credit facility to Ba3 from B1 after the company improved its operating performance. For the last 12 months ending Sept. 30, 2000, earnings before interest and taxation margins were 6.2%, while gross product margins reached 15.8%. The company's retained cash doubled to nearly $39 million for the same period, up from $17 million for the fiscal year ending June 30, 1999. Interest coverage has also beefed up with earnings before interest, taxation, depreciation and amortization less capital expenditures coverage at 1.8 times. Moody's notes that leverage is still high at 3.9 times. Printpack, based in Atlanta, manufactures flexible packaging products for food and consumer companies. R. Michael Hembree, v.p. finance, did not return calls seeking comment. BANK ONE leads the deal.