Moody's downgrades Tousa

Moody's Investors Service said it lowered Tousa, Inc.'s corporate family rating to Ca from Caa2 and its probability-of-default rating to C from Caa2.

Also downgraded were the first-lien senior secured term loan to Caa1 (LGD2, 19%) from B2 (LGD2, 19%), second-lien senior secured term loan to Ca (LGD4, 52%) from Caa2 (LGD4, 52%), senior unsecured notes to C (LGD5, 72%) from Caa3 (LGD5, 72%) and senior subordinated notes to C (LGD6, 91%) from Ca (LGD6, 91%).

The outlook is negative.

Moody's said the downgrades reflect questions about the company's viability as an ongoing concern given considerable writedowns and the virtual elimination of its net worth.

Concerns also include a weak macro environment, ongoing losses, high debt leverage, elevated inventory levels, continued non-compliance with bank covenants, potential delisting from the New York Stock Exchange and negative cash flow, the agency said.

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