Moody's cuts Aventine

Moody's Investors Service said it downgraded Aventine Renewable Energy Holdings Inc.'s corporate family rating and probability of default rating to Caa3 from Caa1.

Concurrently, the agency said it downgraded Aventine's term loan rating to Caa3 from Caa1. The ratings were also placed under review for downgrade.

The speculative grade liquidity rating is unchanged at SGL-4.

Moody's said the downgrade reflects Aventine's weakened liquidity due to an expected reduction in unrestricted cash balances, a dramatic increase in corn prices resulting from ongoing severe drought in the main corn producing areas in the US, a decrease in crude oil prices and a reduction in discount between ethanol and gasoline prices that could reduce demand for corn-based ethanol.

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