Moody's upgrades Stagecoach

Moody's Investors Service upgraded Stagecoach plc to investment grade including raising its $500 million 8.625% senior unsecured notes due 2009 and €400 million 6% senior unsecured notes due 2004 to Baa3 from Ba1. The outlook is stable.

Moody's said the upgrade reflects the material improvement in Stagecoach's overall credit metrics following the disposal of a substantial part of the Coach USA business; the operational streamlining of Coach USA and stabilization of operating performance; cash flow is expected to have greater stability and consistency going forward; the additional reduction in leverage following other divestments; the signing of a new 3-year SWT Franchise agreement, which provides additional comfort and improved cash flow visibility from the rail business and; expectation that operating performance will continue to be in line with Moody's expectations.

The ratings also factor substantially improved liquidity following the asset disposals, which Moody's said it believes now provides an adequate cushion for the company to meet its operating/capital expenditures and maturing financial obligations over the next 12 months.

Moody's rates GazInvest notes Ba2

Moody's Investors Service assigned a prospective Ba2 rating to GazInvest Luxembourg SA's $300 million medium-term notes. Proceeds will be used to fund a loan by J.P. Morgan Bank Luxembourg to the Joint-stock Bank of the Gas Industry Gazprombank.

Moody's said the ratings reflect strength of the structure and the protection furnished by early amortization events, the ability of Gazprombank to make timely payments of interest and ultimate payment of principal on the loan, the effective segregation of GazInvest's rights to the Fiduciary Deposit Account and to the loan repayments afforded by Luxembourg law, the charge and assignment of rights and interests by GazInvest to the trustee for the note holders under English law and triggers linked to the performance of the loan and to the ability of J.P. Morgan Bank Luxembourg to act as fiduciary.

Moody's raises SPP outlook

Moody's Investors Service raised its outlook on Slovensky Plynarensky Priemysel, as' €200 million senior unsecured notes to positive from stable.

Moody's said the outlook change reflects its expectation of ongoing improvement in SPP's financial performance, the benign regulatory regime in Slovakia and the company's restructuring under the management of its foreign shareholders which is resulting in significant improvements in SPP's operating efficiency.

SPP's credit profile has improved considerably over the past 18 months with the sale of 49% of the company to Aa3 rated Gaz de France and Ruhrgas, the gas subsidiary of A1 rated E.on, Moody's added. While no direct support is offered by these new shareholders, they hold day-to-day operational control of the company and are making significant cost reductions, as well as instituting improvements in corporate governance which were evidently lacking in the past.

At the same time, SPP has benefited from material hikes in gas prices authorized by the Slovak regulator in order to render the domestic market profitable from 2004, ending the cross-subsidization of the market from SPP's international gas transit activities.

The combination of increased prices and improved efficiency resulted in a doubling of SPP operating profit in 2002 which appears likely to be considerably strengthened again in 2003.

Moody's said it believes that Slovakia's forthcoming entry into EU is unlikely to have a materially negative impact on SPP, at least not in the intermediate term, as SPP will continue to dominate the liberalizing domestic market which may not be of a scale or margin to attract high levels of competition from other gas players, and to benefit from high levels of international transit of Russian gas in Western Europe where consumption continues to rise apace. For these reasons Moody's said it sees potential for SPP's rating to rise into investment grade once its various strategic and accounting issues have been resolved.

Moody's confirms Chateau Communities

Moody's Investors Service confirmed Chateau Communities, Inc. including CP LP's senior unsecured notes at Ba1 with a stable outlook.

Moody's said the ratings assume the merger with Hometown America is completed.

Moody's said the action reflects the tendering of approximately 96.4% of the REIT's unsecured notes as of Oct. 6 and the REIT's announcement that the unitholders of Chateau's operating partnership have approved the merger in addition to the stockholders, completing the last condition to closing the merger of Chateau into Hometown America.

The action also reflects stresses in the manufactured housing industry and uncertainty regarding the future financial profile of Chateau.

After the merger closes, Moody's intends to withdraw its ratings on Chateau's securities.

Moody's confirms Taubman

Moody's Investors Service confirmed Taubman Centers, Inc.'s preferred stock at B1 and changed the outlook to stable from developing.

Moody's said the rating action follows the withdrawal on Oct. 8 of a tender offer for Taubman's common stock by Simon Property Group and Westfield America, ending their almost year-long effort to acquire the REIT through a hostile takeover.

The B1 preferred stock rating incorporates Taubman Centers' ownership of one of the most productive regional retail mall portfolios in the USA, Moody's said. However, the REIT has had a substantial development pipeline, which is a risk.

In 2001, Taubman opened four newly developed regional malls - Dolphin, Willow Bend, International Plaza and Wellington Green - which have experienced slower than expected lease up, leading to weak overall portfolio occupancy which was 85.5% at the end of the second quarter, compared to 84.2% at the end of the second quarter of 2002.

Positively, The Mall at Millenia in Orlando, Fla. which opened in October 2003, is performing well, as evidenced by 95% occupancy at the second quarter of 2003.

Fitch cuts Desc

Fitch Ratings downgraded Desc, SA de CV's senior unsecured foreign and local currency ratings to B+ from BB. All ratings remain on Rating Watch Negative.

Fitch said the action reflects continued pressures on revenues and profitability and the erosion of operating fundamentals as a result of the difficult economic and competitive environment affecting Desc's main businesses.

The new debt ratings also incorporate the expectations that Desc will successfully complete the refinancing of approximately $700 million of bank loans within the next several weeks. Proceeds from the new facilities are expected to refinance current maturities of long-term debt. Balance sheet cash and the new bank facilities will afford Desc near-term liquidity, although financing costs may increase under the restructuring, Fitch said.

The new facilities are expected to grant security interest to bank creditors and other lenders so that the vast majority of Desc's debt would be secured. Under such a scenario, Fitch would potentially notch up the company's senior secured debt to BB- .

Fitch Ratings views the closing of the new financing arrangements as a positive and crucial step to alleviate Desc's near-term liquidity needs, hence a successful completion may result in the removal of the ratings from Rating Watch Negative. Failure to complete the refinancing may result in further pressures on credit quality.

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