Moody's: Tekni-Plex outlook negative

Moody's Investors Service said it affirmed the ratings of Tekni-Plex, Inc. and changed the outlook to negative from stable.

The company's ratings remain constrained by high financial leverage, poor interest coverage and negative free cash flow, the agency said.

Moody's affirmed the corporate family and probability-of-default ratings at Caa1, $275 million 8¾% senior secured second-lien notes due 2013 at Caa1 (LGD3, 46% from LGD3, 45%), $150 million 10.87% senior secured second-lien notes due 2012 at B1 (LGD2, 16% from LGD2, 15%), $275 million 12¾% senior subordinated notes due 2010at Caa3 (LGD5, 85%) and $40 million 12¾% senior subordinated notes due 2010 at Caa3 (LGD5, 85%).

The change in outlook reflects the company's disappointing operating results in the tubing segment, its increase in leverage and further strained interest coverage year on year, the agency said.

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