MOODY'S CUTS TEXAS AIR <TEX>, AFFIRMS EASTERN
Moody's Investors Service Inc said it
downgraded Texas Air Corp's 410 mln dlrs of debt and affirmed
the unit Eastern Air Lines Inc's 703.4 mln dlrs of debt.
    The agency cut Texas Air's senior secured debt to B-3 from
B-2, but affirmed the company's Caa subordinated debt and B-3
junior preferred stock.
    Moody's affirmed Eastern Air's B-3 senior secured debt and
Caa subordinated debt and junior preferred stock.
    The parent's downgrade recognized risks associated with
Texas Air's investment in operating companies that will require
substantial external financing to buy aircraft.
    Moody's also cited Texas Air's secondary position to the
cash flow and assets of its subsidiaries, relative to its
subsidiaries' creditors, and the insufficiency of the holding
company's cash flow to meet fixed charges.
    The agency noted that Texas Air has adequate liquidity to
service its obligations, but cautioned there is no guarantee
that its liquidity will remain stable.
    Moody's said it affirmed Eastern's debt ratings amid
expectations that recent improvements in the unit's operating
measures would be maintained. But it added that a substantial
decline in financial leverage is unlikely.
 Reuter
