Moody's lowers Unifrax

Moody's Investors Service said it lowered Unifrax LLC I's corporate family rating to Caa1 from B3 and the ratings on the $50 million revolving credit facility and the term loan B to B2 from B1.

The downgrades reflect Moody's concern that the company may not meet its credit agreement covenants notwithstanding the equity cure provision due to the uncertainty over the timing of a sustainable recovery in demand for its products, the agency said.

The outlook is negative.

Moody's added that the lower corporate family rating reflects Unifrax's expectation that it will require an equity cure to maintain compliance with the financial covenant in its credit agreement in the third quarter of 2009.

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