Moody's: Rinker unaffected

Moody's Investors Service said Cemex, SAB de CV's recent cancellation of a major asset sale and the company's reduced 2007 earnings guidance will have no immediate effect on Rinker Group Ltd.'s ratings.

These announcements, however, have increased the sense of urgency for debt and cost reduction in order to avoid further ratings pressure, the agency said.

"Consistent debt reduction over the next several quarters will be necessary for Rinker's ratings to stay at the current Baa2/P-2 level because of Cemex's higher than anticipated leverage after the Rinker acquisition, continued margin pressure from the decelerating U.S. housing market and tight covenants," Moody's analyst Sebastian Hofmeister said in a written statement.

"To avoid a downgrade, Moody's would expect Cemex to make steady progress in reducing adjusted debt-to-EBITDA from its current level of 4.6 times to 3.8 to 4 times over the next 12 months and in building an adequate covenant cushion over the same timeframe," Hofmeister said.

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