Moody's downgrades PBG

Moody's Investors Service said it lowered PBG SA's corporate family rating to Ca from Caa1 and probability of default rating to D from Caa3.

Moody's said the downgrade of PBG's probability of default rating to D reflects the announcement that (a) PBG and two of its subsidiaries, Hydrobudowa Polska and Aprivia, filed voluntary petitions for insolvency which include the option to restructure their debts; and (b) the standstill agreement with its banks has been terminated.

The downgrade of the corporate family rating to Ca reflects Moody's estimate that overall recovery levels are likely to be lower than 65%. Moody's said it believes that there is considerable execution risk related to obtaining agreement from its creditors to the restructuring proposal and PBG could be obliged to file a petition for final liquidation.

Moody's said recovery levels are likely to be depressed in a final liquidation, particularly for receivables, which represent its largest class of assets.

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