Moody's rates new Siemens convertible Aa3

Moody's Investors Service assigned an Aa3 rating to the €2.5 billion senior convertible notes due 2010 of Siemens Finance BV and guaranteed by Siemens AG. The outlook is negative.

The rating reflects large, well-diversified operations, an expectation that focus on efficiency and cost-competitiveness will result in material improvements in operating performance and management's commitment to a solid balance sheet and a strong liquidity position, Moody's said.

It also factors in weak operating margins compared to its peers, the challenge of driving a very large range of businesses to maximum efficiency, execution risk to restructuring in the midst of a cyclical downturn and Siemens' pension funding deficit of €5 billion even after some €3.6 billion in contributions over the past two years.

The outlook reflects rating pressure if Siemens were to lag significantly behind its operating profitability improvement targets, Moody's said.

Fitch rates AmerUs mandatory BBB

Fitch Ratings assigned a BBB rating to AmerUs Group Co.'s new mandatory convertible and affirmed all other ratings. The outlook is stable.

Pro forma total financial leverage-to-capital at March 31 was 30%, which assumes proceeds from the mandatory are used to pay down outstanding bank debt. On Fitch's equity-adjusted basis debt-to-capital was 17% compared to AmerUs' target of 25%.

The company's pro forma run-rate fixed charge coverage was is in the range of 6-8x, and the calculation eliminates realized investment gains or losses from the earnings figure. This level of fixed charge coverage is considered solid, and remains an important component of the ratings, Fitch said.

AmerUs management is targeting a 12% or greater return on earnings by the end of 2003, which appears achievable but is sensitive to market conditions.

Moody's cuts Agilent to junk

Moody's downgraded Agilent Technologies Inc.'s senior unsecured ratings, including its convertible notes to Ba2 from Baa2. The outlook is negative.

The downgrade reflects considerable and protracted operating losses, ongoing cash outflows related to restructuring, under-funded pension plans and continued end market weakness in telecoms, electronics test, and semiconductor products, Moody's said.

The negative outlook reflects an expectation that end market demand will make near-term revenue growth difficult and that ongoing pricing pressure may require further restructuring actions.

Moody's noted Agilent has no near-term liquidity issues, with over $1.5 billion of cash and over three years before the first put date on its convertible, but it has no alternate liquidity, so it is critical Agilent stem the erosion of cash.

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