Moody's: CPG view positive

Moody's Investors Service said it changed the outlook of CPG International I Inc. to positive from stable to reflect its improved operating performance and declining leverage.

Moody's also lowered the speculative grade liquidity rating to SGL-3 from SGL-2 due to the nearing maturity of its asset-based lending facility as early as January 2012. The agency also said it affirmed its corporate family rating at B3 and probability of default rating at B3, along with the Caa1 rating (LGD 4, 59% from 61%) on the $150 million senior unsecured notes due July 2013 and the Caa1 rating (LGD 4, 59% from 61%) on the $128 million senior unsecured notes due July 2012.

The positive outlook is reflective of CPG's ability to gain market share within its AZEK and Scranton product lines despite weakness in the North American residential and commercial building markets, grow its revenue base and enhance profitability over the past few quarters, Moody's said.

While earnings volatility is inherent in the business, due to both its exposure to resin costs and to seasonal order trends, the agency said it anticipates that CPG will continue to benefit from the ongoing conversion to their low maintenance products for exterior housing applications from traditional wood and metal products.

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