Moody's rates USG notes B2

Moody's Investors Service said it assigned a B2 (LGD 2, 28%) rating to USG Corp.'s new senior unsecured notes due 2018, and affirmed its Caa1 corporate family rating, Caa1 probability of default rating, along with its $300 million senior unsecured notes due 2014 at B2 (LGD 2, 28%), $500 million senior unsecured notes due 2016 at Caa2 (LGD 5, 76%), $500 million senior unsecured notes due 2018 at Caa2 (LGD 5, 76%), senior unsecured shelf registration notes at provisional Caa2, $239 million of industrial revenue bonds with various maturities at Caa2 (LGD 5, 76%). Its speculative grade liquidity rating remains SGL-3.

The outlook is stable.

The ratings result from weak operating performance, Moody's said.

The agency said it believes that USG's ongoing restructuring initiatives continue to be insufficient, leaving its cost position untenably high at current throughput levels.

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