Moody's downgrades Indalex

Moody's Investors Service said it downgraded Indalex Holding Corp.'s corporate family and probability-of-default ratings to Caa2 from Caa1 and second-lien senior secured note rating to Caa3 (LGD5, 75%) from Caa2 (LGD5, 71%).

The speculative grade liquidity rating was affirmed at SGL-4.

The outlook is negative.

Moody's said the downgrade and negative outlook reflect the company's deteriorating liquidity position driven by greater-than-expected volume declines and further weakening in end markets, which could persist through 2008.

Indalex's Caa2 corporate family rating reflects the high financial leverage, high fixed cost base and expectation of breakeven to negative free cash flow over the intermediate term, the agency said.

Strong market position and ability to pass through aluminum costs support the ratings, Moody's noted.

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