S&P puts AGY on watch

Standard & Poor's said it placed AGY Holding Corp.'s B corporate credit rating and the B issue-level and 4 recovery ratings assigned to its $175 million 11% second-lien senior secured notes due 2014 on CreditWatch with negative implications.

The agency said the CreditWatch placement takes into account the meaningful deterioration in AGY's earnings in the second quarter in addition to heightened uncertainties about its business prospects over the next several quarters. S&P said it is also concerned that liquidity has declined, and the company announced that it expects to request a five-day extension from the SEC for filing its second-quarter 10-Q report.

S&P will resolve the CreditWatch in the next few days when the company files its consolidated second-quarter financial results. The agency said it could lower the ratings if it expects EBITDA to weaken meaningfully from the levels of approximately $50 million achieved in 2008 or if it anticipates that liquidity will decline from the current $16 million level.

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