Standard&Poor's revised its outlook on France-based multi-utility Vivendi Environnement S.A. (VE) to negative from stable on May 7, 2002. The revision reflects the credit-quality erosion of parent Vivendi Universal S.A. (VU) (see the press release published on May 6, 2002, on RatingsDirect, Standard&Poor's Web-based credit analysis system), and the consequent reduction in 63%-owned VE's flexibility to issue fresh capital, which puts pressure on VE's covenants and triggers. VE's flexibility has weakened in light of the very tight financial covenants on its €5.9 billion in bank loans, including EBITDA net interest coverage of 4.5 times (x) by 2002 and 5.0x by 2003 (versus 4.9x in 2001), taking into account the company's growth and acquisition policy. In addition,
