Moody's drops Terex

Moody's Investors Service said it lowered the long-term ratings of Terex Corp., including the corporate family rating to B2 from B1, senior secured to B2 from B1 and senior subordinate to Caa1 from B3.

The agency said the rating action is prompted by the company's announcement it will require additional time to complete the filing of its financial statements for the year ended Dec. 31, 2004 and prior periods with the SEC.

The rating action reflects Moody's concerns that Terex's ongoing inability to file financial statements places it in violation of covenants contained in its bank lending agreement and necessitates continued extension of waivers from the bank group in order to maintain adequate liquidity, the agency noted.

The negative rating outlook reflects the uncertainty surrounding the resolution of the accounting investigations being conducted by the company and by the SEC, and the potential risk to the company's liquidity position given the Oct. 15 expiry of existing bank waivers, Moody's said.

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