Source, Corporate Rating News  (The following statement was released by the ratings agency)

NEW YORK, June 20 - Moody's upgraded Pride International's liquidity rating to SGL-2 from SGL-3, indicating good combined direct and alternative liquidity. Pride's senior implied rating is Ba1 and its senior unsecured note rating is Ba2. The upgrade to SGL-2 reflects: (1) rising operating cash flow cover of interest expense and capital expenditures, (2) successful refinancing earlier this year of Pride's putable convertible debt, (3) the fact that cash balances, cash flow, and fully-undrawn bank revolver availability indicate internal coverage of scheduled capital spending and debt maturities over the next twelve months, (4) a fully undrawn available $250 million revolver, and (5) good alternative liquidity. Moody's estimates that Pride's 2003 EBITDA will be in the range of $450 million to $470 million range and free cash flow after interest expense, working capital changes, and capital spending will be in the range of $110 million to $130 million. After issuing $300 million of unrated convertible senior notes this year and repaying $211 million of putable notes and $165 million of bank revolver debt, Moody's estimates cash balances to now be roughly $135 million. By year-end 2003, cash balances may materially exceed $200 million. The SGL-2 rating is restrained by, and sensitive to, bank loan covenant coverage that may continue to be tight at June 30, 2003, December 31, 2003, and again in 2004. Pride's expected pace of earnings and cash flow growth is nearly matched by covenant tightening during that period, though the tightening covenants do further reinforce Pride management's and board of directors' clear intention to significantly reduce leverage. The SGL-2 rating cannot rise if Pride continues to operate relatively close to its bank loan covenants. An upgrade of the SGL rating over the next twelve months would likely require a substantial debt reduction with proceeds of either newly issued equity or conversion of existing convertible instruments. In the meantime, retaining the SGL-2 rating depends on Pride meeting its bank loan covenants while firming of the rating would occur when Pride also refinances or extends the maturity of an early 2004 $86 million seller note maturity and a $75 million 2004 European credit line maturity. The SGL-2 rating is supported by significant alternative liquidity. While the $250 million bank revolver and $200 million bank term loan are secured by twenty-eight GOM jack-up drilling rigs and by two semisubmersible rigs, the unencumbered base is relatively large. This includes receivables of over $300 million at mid-year 2003, roughly $400 million of mostly offshore unencumbered jack-up and platform rigs, and Pride's large valuable South American land rig business. Unencumbered rigs can be monetized, but proceeds must first retire Pride's loan facilities, whereas qualified receivables could be monetized without retiring bank debt. Trailing four quarters net income and defined EBITDA are expected to continue rising as previous trough quarters are replaced by stronger quarter results but Pride's Debt/Capital, Defined EBITDA/Interest, and Defined Debt/Defined EBITDA convenant tests will retighten through to March 31, 2004. The Debt/EBITDA test (trailing four quarters) declined from 4.95x at September 30 and December 31, 2002 to 4.75x on March 31, 2003, 4.50x on June 30 and September 30, 2003, 4.0x at year-end 2003, and 3.50x on March 31, 2004. Net Debt/Total Capital steps down from 55% through to September 30, 2003, to a possibly tight 50% by year-end 2003, and 45% by March 31, 2004. The EBITDA/Interest test stepped up from 3.0x in 2002 to 3.25x through 2003, and 4.00 by March 31, 2004. Pride easily meets its Net Worth Test. Moody's anticipates ongoing net debt reduction due to constrained capital spending, rising cash flow from new term drilling contracts and firming in rig activity in the Gulf of Mexico, assuming Pride's other markets do not decline materially. After political and fiscal turmoil in Argentina and Venezuela, Pride reports that its Argentine land rig business is operating at high utilization and that its Venezuelan land rig and barge rig business is firming too. One hundred percent of Pride's international jack-up, semisubmersible, and drillship fleet are under contract. However, Pride's U.S. GOM mat-supported jack-up fleet is at 46% utilization (six of thirteen rigs utilized) and Pride's mat-supported Gulf of Mexico jack-up rigs face stiff marketing competition from a key competitor. Along with other competitors, Pride is deploying rigs out of the U.S Gulf of Mexico market and into the Mexican Gulf of Mexico market. Moody's expects debt and leases at year-end 2003 of roughly $1.8 billion, down $40 million from March 31, 2003, and excluding $225 million in non-recourse debt in the now 30% owned Amethyst 4 and 5 joint venture. In the 1997 through 200x period, Pride incurred very substantial leverage to fund acquisition and construction of an offshore drilling rig fleet, including a deepwater semi-submersible drilling rig and drillship fleet now generating strong core contracted cash flow. Core cash flow should rise as term contracts generate a full quarter's activity for the deepwater fleet and as the rising number of term contracts with PEMEX for commodity jack-up rigs impact cash flow. Fairly recent term contracts include the Pride South Pacific semisubmersible, twelve contracts with Pemex for mat-supported jack-up rigs (bringing to sixteen its total rigs on contract with Pemex), and two jack-ups signed for other offshore markets. Eleven of the fourteen rigs placed into contracts here came off of inactive status. For 2003, Moody's projects $450 million to $470 million of EBITDA, with roughly $100 million of increased working capital investment absorbing that amount of cash flow. EBITDA peaked at $511 million in 2001 during up-cycle conditions and on the placement of Pride's new high-end drilling assets into drilling contracts. EBITDA bottomed at $369 million in 2002, beating Moody's projection of $362 million, on down-cycle conditions in the Gulf of Mexico and disruption in its Argentine and Venezuelan markets. Working capital increases absorbed approximately $114 million of cash flow in 2001 and reductions in working capital investment freed-up approximately $79 million of cash in 2002. Pride International, Inc. is headquartered in Houston, Texas.

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Thursday, June 19, 2003 By: Steven Hunt

Date: Wed, 18 Jun 2003 22:48:43 -0400 From: Steven Hunt  ecocentricsolutions@earthlink.net To: Editor@VHeadline.com Subject: The Euroization of Global Oil Currency

Dear Editor: As usual, a very perceptive report on the possibility of using the €uro over the sinking US dollar in Venezuela. I would say for Chavez to go for it ... but not at the expense of provoking dire attacks from the Gringo thugs.  Being patient as a Chinaman might be the best course.

I do not, however, see the Saudis doing this any time soon -- they depend so much on the US for continued corrupt, elite rule in that nation. Granted, the fundamental economic logics of using the €uro might win the day. But there will be hell to pay, rest assured.

I also would not emphasize too much the possibility of Iran converting to the €uro as the rationale for destabilizing the Iranian government.  There is a long lingering hatred for that country on the part of the "neocons" and their imperialist brethren for showing up the US with the last revolution. The benefit for Bush, for stoking a conflict with Iran, might have more to do with the short-term need to promote irrational patriotism and fear in the US population so as to divert attention away from the worsening condition of the US economy and relentless and craven austerity.

But we can be assured that the corrupt US corporate media will do its part in providing the rationale for an Iran/US conflict when the time comes. (Whether the population will buy into it a la Iraq is an open question)

As usual, I respect your organization's journalism and allegiance to authentic democracy.

Steven Hunt ecocentricsolutions@earthlink.net

SourceBy Thalif Deen STOCKHOLM - The "war on terrorism" has triggered a dramatic increase in US military spending, according to a report by the Stockholm International Peace Research Institute (SIPRI) released on Tuesday. The world spent US$784 billion on arms last year, a sharp acceleration from $741 billion the previous year, the SIPRI report says. The United States accounted for almost three-quarters of that increase. SIPRI attributes this increase primarily to the US response to the terrorist attacks of September 11, 2001. But US military spending had been rising earlier too. The figures show that US military spending climbed from about $296 billion in 1997 to $335.7 billion last year. "Our figures show clearly that the bulk of the rapid increase in spending in 2002 is accounted for by the United States alone," SIPRI director Alyson J K Bailes said. The US Department of Defense has estimated US military spending for 2004 at about $390 billion, rising to $400 billion in 2005. The recent war on Iraq is expected to cost the United States more than $150 billion; by contrast, the 1991 Gulf War cost about $61 billion. Japan, the world's second-largest military spender, is far behind the United States with an annual defense budget of $49 billion, followed by the United Kingdom with $36 billion. The top five spenders - the US, Japan, the UK, France and China - account for about 62 percent of total world military expenditure. According to the SIPRI Yearbook, the United States now accounts for 43 percent of world military expenditure. China, Russia and Brazil have all increased defense budgets significantly. The countries with the sharpest reductions in military spending in 2002 were Argentina, Guatemala and Venezuela in Latin America and Belarus and the Former Yugoslav Republic of Macedonia in Europe. The European Union shows no sign of following the United States in raising defense budgets, Bailes said. And while the Russian budget has risen, its possibilities are limited, she added. "A review of global expenditure trends shows that the rest of the world is not prepared, or cannot afford, to follow the US example," SIPRI says in the yearbook. Among the poorer nations the signs are mixed, said Bailes. "Some nations are able to cut spending voluntarily because of the ending of local conflicts, or they are being forced to do so by economic problems. As the security sector reform becomes a serious focus both of international aid policy and of local security cooperation, we may also see improvements in what could be called the quality (rationality, transparency, and proper targeting) of defense spending, which can often be combined with quantitative cuts," she said. Some former defense funds are not being cut so much and are being diverted to internal and non-traditional security aims such as counter-terrorism, she added. But there is pressure also to increase defense budgets because of factors such as keeping up with the latest technological advances, and the interest of developing states in peacekeeping and other interventions, Bailes said. The impact of increased military aid that the United States in particular is offering is also a factor, she said. The SIPRI Yearbook notes marked regional disparities in military expenditure. In 2001 the Middle East spent 6.3 percent of gross domestic product (GDP) on the military compared with a global average of 2.3 percent. Latin America spent only 1.3 percent. Africa (2.1 percent), Asia (1.6 percent) and Western Europe (1.9 percent) spent less than the world average while North America with 3.0 percent and Central and Eastern Europe with 2.7 percent spent somewhat more. The Middle East is the largest single market for US weapons systems. The 1990 Iraqi invasion of Kuwait prompted sharp increases in arms purchases by the six Persian Gulf nations - Bahrain, Oman, Qatar, Kuwait, Saudi Arabia and the United Arab Emirates. Asked whether arms purchases would decline after the ouster of Iraq's Saddam Hussein regime by US military forces, Bailes said, "Whatever uncertainties may still remain over aspects of Iraq's future and its future regime, it seems clear that for a long while at least we shall not see another belligerent Iraq with the power and the wish to threaten its neighbors." An international stabilizing force on Iraq's soil for some time could allow other states to reduce their level of military preparedness, Bailes said. But the results could be different if outside powers build new military "clients" to compete with others, she added. Jayantha Dhanapala, former United Nations undersecretary general for disarmament affairs, said the rising global military expenditure is not just diverting precious financial, material and human resources from productive to non-productive pursuits, but also jeopardizing the environment and the prospects for social and economic development. Sixteen years ago the world community gathered at the United Nations for the International Conference on the Relationship between Disarmament and Development. Yet today military expenditure is rising, he said.

By Kristen Gerencher, <a href=cbs.marketwatch.com>CBS.MarketWatch.com Last Update: 12:01 AM ET June 13, 2003

SAN FRANCISCO (CBS.MW) - Americans looking for foreign getaways where their money goes far are hard-pressed this year-- even Russia and India's currency has gained on the greenback.

Few nations think enough of the relative state of the U.S. economy to pay more for the dollar than they did a year ago. Count out all the major tourist destinations in Europe, as well as Japan.

"Even the Turkish lira, which had been a substantially weak currency last year, actually appreciated against the U.S. dollar this year," said Tom O'Malley, head of currency portfolio management at Barclays Global Investors in San Francisco.

"Your dollar still will get you a lot in that country, but it won't get you as much as it did," he said, noting that at the end of last June, $1 USD would have bought about 1.6 million lira compared with today's slightly more than 1.4 million.

The same is true for India, where you'll get 46.5 rupees to the dollar, said Chuck Butler, president of Everbank World Markets in St. Louis, Mo. "A year ago it was at 49. Even countries that don't have economies worth a shake of salt are gaining against the dollar."

So where can you go to get a better exchange rate than last year? Mostly they're places that appeal to adventure and environmental tourists.

Nations trading lower against the dollar in the last 12 months include Nigeria, Colombia, Egypt, Venezuela, Costa Rica, Uruguay, Zimbabwe and Jamaica, Butler said.

"If you want to go to Zimbabwe, their dollar is down 93 percent against the U.S. dollar, but I don't know that they have huge caravans of people going over there," he said.

Americans can get 58 Jamaican dollars to one U.S. dollar this year compared with 47 a year ago -- a 17 percent discount, Butler said.

Mexico as exchange-rate star

While the U.S. dollar has slid against many foreign currencies in the last year, travelers itching to go abroad without paying a premium still have a few corners of the globe they can explore - and one is close to home.

Americans will find the biggest bang for their U.S. buck in the opposite direction of Canada, last year's premiere currency destination.

While the U.S. dollar has taken a plunge against that of its northern neighbor, the Mexican peso has slipped, offering Americans more than 8 percent off last year's exchange rate, O'Malley said.

"If last year was the time to go north of the border, if there's any place left where the dollar is still as strong as it had been, it's south of the border in Mexico," he said.

"Right now you get about 10.5 pesos to the dollar, which is near the all-time exchange rate high, which was about 11.25 in March of this year," he said. Last year Mexico offered 9.5 pesos to the dollar.

Canada, on the other hand, is now offering Americans 1.35 to the U.S. dollar compared with 1.5 to 1.62 last summer, O'Malley said. "Things will be at least 10 to 20 percent higher in Canada this year compared with last year."

Europe gets pricey

Travelers watching their pocketbooks may have to kiss dreams of visiting Paris and Rome goodbye this summer. The euro, the shared currency of 13 European nations, is up 24 percent since last year, and Scandinavian nations such as Sweden and Denmark are up 25 percent, Butler said.

Even the South Pacific has marked up its exchange rate, to the tune of 17 percent for New Zealand and 16 percent for the Australian dollar, he said. "There's a roll call here and it's pretty devastating."

O'Malley agreed. "Europe has gotten much more expensive due to the appreciation of the euro against the dollar. For much of the second half of last year, the euro and the dollar were at about parity."

It now takes $1.17 to buy one euro, he said. Meanwhile, South America's rise against the dollar has been less remarkable.

"From December to June of this year, the Brazilian real has appreciated 17 to 20 percent," O'Malley said. "This time last year it was at about the same rate as it is now -- about 2.9 real to the dollar."

"South America has always been a fairly inexpensive place as far as what the dollar will get you. That's still true today. The dollar just won't go as far as it did, say, six months ago." Kristen Gerencher is a reporter for CBS.MarketWatch.com in San Francisco.

June 12, 2003: 6:38 PM EDT By Justin Lahart, CNN/Money Senior Writer

NEW YORK (CNN/Money) - Quick, which widely-watched asset has risen most over the past month?

Nope, it's not stocks and it ain't bonds. Not gold or pork bellies, for that matter. No, it's oil, which has risen 18.3 percent and now trades for $32.36 a barrel on the New York Mercantile Exchange.

The black stuff has traded higher during only three periods over the past 15 years -- before the recent war in Iraq, in the mini-energy crisis that hit the country in late 2000 and during the lead up to the first Gulf War.

This isn't the way it's supposed to go. As it became clear that the war in Iraq was not going to go as badly as some traders feared, and that Saddam Hussein lacked the will or, more likely, the ability to scorch his country's oil fields, the market was enthusiastic that oil prices would come scuttling down.

And for a while they did -- but then they bounced back up as it became clear that, thanks to continued looting and 12 years of neglect, Iraq's oil fields would not come on line as quickly as U.S. officials had led the market to believe. Meanwhile, inventory levels remain low after being depleted by the harsh winter, unrest in Venezuela and Nigeria and the conservative stance many buyers took during the lead-up to the Gulf War on the worry that the government might release oil from the Strategic Petroleum Reserve.

Officials are promising that more Iraqi oil will be flowing soon -- at present the country is pumping about 700,000 barrels a day, but they say output could come to a daily 1.5 million barrels by the end of the month. But given the too-optimistic forecasts of the past, said Fimat USA energy analyst Mike Fitzpatrick, the industry is skeptical.

For the economy, the way oil prices keep sticking higher is not a good thing. Higher energy prices act as a tax on both consumers and businesses, drawing money away that might be spent elsewhere. With the summer driving season upon us and gasoline going, on average, for $1.50 a gallon, much of the money from the big tax cut Washington just passed may go straight to the gas tank. The rule of thumb, according to Deutsche Bank chief U.S. economist Carey Leahey, is that each dollar rise in oil cuts $5 billion out of consumer spending.

The only posititve you can possibly draw from the higher oil prices, said Leahey, is that they may reflect better demand, suggesting a better economy. But this is just a faint ray in an otherwise gloomy story.