Moody's drops Continental Alloys

Moody's Investors Service said it downgraded Continental Alloys & Services, Inc.'s ratings: corporate family rating to B3 from B2, probability of default rating to Caa1 from B3, and senior secured bank credit facilities ratings to B3 from B2.

The outlook is stable.

The agency said that this rating action ends a review for possible downgrade initiated on April 3.

Moody's noted that it had placed Continental's ratings under review for possible downgrade following weaker than expected operating performance and concerns that the company's performance could continue to deteriorate, creating financial covenant compliance pressure.

The rating downgrade reflects Moody's concerns that Continental's earnings and liquidity could face pressure over the near-term, despite improved third quarter 2008 results.

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