Fitch cuts Asarco to D

Fitch Ratings said it downgraded the long-term senior unsecured corporate credit rating of Asarco Inc. to D from C. The company's notes due in 2013 and 2025 for face values of $100 million and $150 million, respectively, have also been downgraded to D from C.

Fitch said these rating actions are a result of the company's failure to make interest payments due in October on its tax-exempt obligations and the notes due in 2013. Nonpayment was expected after Asarco filed a voluntary petition in August for Chapter 11 reorganization under the U.S. Bankruptcy Court in Corpus Christi, Texas.

Asarco's challenges include negotiating with state and federal authorities over environmental liabilities, with plaintiffs filing asbestos-related personal injury claims, as well as with the company's own labor force, which has been on strike since early July. The company also has high production costs relative to its peers within the copper industry, Fitch said.

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