Moody’s downgrades Horsehead

Moody’s Investors Service said it downgraded the ratings of Horsehead Holding Corp., including its corporate family rating to Caa2 from B3, probability of default rating to Caa2-PD from B3-PD and senior secured notes to Caa1 from B2.

The company’s speculative grade liquidity rating was lowered to SGL-4 from SGL-3.

The outlook is negative.

The downgrades result from the continued delays at the company’s new zinc production facility, Moody’s said.

The downgrades also reflect the company’s weak earnings performance as evidenced by negative EBITDA of $25 million for the nine months that ended Sept. 30, the agency said.

The downgrades also consider the subsequent deterioration of the company’s liquidity position as a result of the weak operating performance and continued capital spending on the new facility, Moody’s added.

The ratings are supported by the company’s solid position as a leading U.S. producer of zinc metal and zinc oxide and as a recycler of other metals recovered through its high temperature metals recovery facilities, the agency said.

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