Moody's lowers Worthington

Moody's Investors Service said it downgraded Worthington Industries, Inc.'s senior unsecured rating to Baa3 from Baa2.

The downgrade results from weak profit margins in the company's core operations, reliance on equity earnings and cash flows from its WAVE joint venture, financial leverage at WAVE and debt-financed acquisitions and share repurchases, Moody's said.

The agency noted that borrowings under its securitization facility have become current and its maturity looms in January 2013, exhibiting an aggressive financial strategy towards its liquidity profile.

The outlook is stable.

The agency also said the company has an senior unsecured domestic-currency rating at Baa3, long-term domestic-currency issuer rating of Baa3 and domestic-currency senior unsecured shelf rating of provisional Baa3.

The downgrade incorporates a view that the company has not shifted reliance from its joint venture to its core operations to generate investment-grade credit metrics, Moody's said.

Worthington's core operating segments are low margin businesses, generating earnings that are more associated with lower-rated entities, the agency said.

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