BANGALORE (Thomson Financial) - Standard & Poor's Ratings Services said it
has lowered its ratings on Georgia Gulf Corp. including its corporate credit
rating to 'CCC+' from 'B-' and that it will lower the ratings further if the
company's covenant situation or liquidity does not improve in the near term.
The ratings agency said the downgrade reflects the polyvinyl chloride
producer's weaker-than-expected operating performance in the first quarter of
2008, continued uncertainty on the timing of improvement of its businesses, and
the increased likelihood that the company will be unable to meet tightening
financial covenants in 2008.
The outlook is negative, it added.
S&P also said it is concerned that challenging operating conditions,
including the ongoing demand weakness in the domestic economy and an expected
increase in PVC resin capacity by competitors, will forestall an improvement in
Georgia Gulf's financial position.
The ratings agency said the negative outlook reflects its concerns about the
potential for deterioration in the company's already constrained liquidity
situation if it is unable to address its covenant compliance issue in a timely
manner.
The prospects for further deterioration in Georgia Gulf's financial
performance given the ongoing weakness in its markets are also a cause for
concern, it added.
TFN.newsdesk@thomson.com
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