Moody's cuts Holcim to Baa1

Moody's Investors Service said it downgraded Holcim Ltd.'s Baa1 long-term issuer and unsecured rating to Baa2 and changed the outlook to stable. The prime-2 short-term rating remains unchanged.

This action concludes the review for possible downgrade that began in March.

The downgrade was prompted by the strong deterioration for Holcim's leverage ratios and operating margins during the course of 2008 and the expectation that these metrics will not improve over the intermediate term to levels more commensurate with a Baa1 rating, Moody's said.

The stable outlook reflects an expectation that the company's net debt ratio will only slightly deteriorate in 2009 or even remain flat, Moody's said, and that the company will be able to generate material positive free cash flows throughout the year despite the continued weaknesses in some of its major markets and high capital expenditure requirements in the current financial year.

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