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Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: American Spirit who wrote (47231)	2/12/2001 1:16:52 PM
From: Softechie	Respond to of 57584

AS Have you noticed I bought 100K of Warnaco (WAC)? Another turnaround story for me. Money is moving from clicks to bricks.

To: American Spirit who wrote (47231)	2/12/2001 2:42:57 PM
From: Softechie	Respond to of 57584

AS UPDATE 1-Moody's, S&P cut Lucent ratings to near junk status -------------------------------------------------------------------------------- (Recasts; adds details throughout; byline) By Jonathan Stempel NEW YORK, Feb 12 (Reuters) - Moody's Investors Service and Standard & Poor's on Monday cut their ratings on telecommunications equipment maker Lucent Technologies Inc. to one notch above junk status. Moody's said its downgrades reflected Lucent's "significant operational difficulties." S&P said its downgrades reflect the belief that Lucent will incur "substantial operating losses" in the near- to intermediate-term. Downgrades ordinarily raise corporate borrowing costs. A downgrade to junk status would force those Lucent investors not permitted to own junk to sell. It would also make it all but impossible for Lucent to sell commercial paper, or short-term debt. Last month, Murray Hill, N.J.-based Lucent posted a $1 billion first-quarter operating loss, and said it will take a $1.6 billion first quarter restructuring charge as it cuts 10,000 jobs and capital spending. On Friday it disclosed it is cooperating with the Securities and Exchange Commission in an accounting probe. A big challenge for Lucent will be to increase its revenues, said Michael Weaver, senior director for another credit rating agency, Fitch. "You have a falloff in demand for products that generated high margins, such as circuit switching systems and software," said Weaver. "The saving grace with any technology company is obsolescence -- the next product can be only 12 to 24 months away, and it will be important for Lucent to hit that cycle." Lucent was not immediately available to comment on the Moody's and S&P downgrades. Its shares fell 19 cents to $15.16 on the New York Stock Exchange early Monday afternoon. They have fallen about 80 percent from their 52-week high of $75.25. DOWNGRADES Moody's cut Lucent's senior unsecured debt rating two notches to "Baa3" from "Baa1," and its short-term debt rating to "Prime-3" from "Prime-2." It said Lucent's restructuring measures are "prudent," yet said "the company will have difficulty" realizing their potential benefits. "Retention of talented personnel throughout the organization will be a major challenge," it said. Moody's said its ratings affect about $3.8 billion of debt. S&P cut its equivalent ratings to "BBB-minus" and "A-3" from "BBB-plus" and "A-2." It said industry competition and a weakening U.S. economy could make it harder for Lucent to hold its ratings. The new ratings are the agencies' lowest investment grades. Their rating outlooks are negative, meaning that conditions are present that may make further cuts possible. Fitch rates Lucent's long- and short-term debt "A" and "F1," and has them on review for downgrade. Weaver said Fitch's ratings, which are roughly four and two notches higher than Moody's and S&P's new ratings, are "not accurate ratings," but said Lucent is in position to right itself. "The company can turn itself around because it has a huge client base for its installed equipment," he said. "That will over time help it reestablish its financial profile." 859-1662, jon.stempel@reuters.com )) REUTERS Rtr 13:51 02-12-01