Moody's lowers Rinker

Moody's Investors Service said it downgraded the rating of Rinker Materials LLC's senior notes to B1 from Ba3.

The rating remains on review for further downgrade, the agency said, adding that the downgrade primarily reflects the imminent refinancing risk that Rinker's ultimate parent, Cemex, SAB de CV, faces in 2009 amid difficult credit market conditions and negative performance trends across Cemex's major markets.

Moody's noted that Rinker's rating reflects Cemex's consolidated credit profile due to both companies' operational and financial integration and the cross default clauses in Cemex's existing debt agreements.

"Cemex's January bank debt restructuring was a positive but at the same time the company provided a weak 2009 EBITDA guidance and still has to address major additional near term debt maturities," said Moody's vice president Sebastian Hofmeister.

According to the analyst, Cemex will have to rely on asset disposals and access to external funding sources in order to meet near to medium term debt obligations, which include $4.1 billion of debt maturities in 2009 that significantly exceed cash reserves and expected free cash flow.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.