Moody's drops Panolam

Moody's Investors Service said it changed the probability of default rating of Panolam Industries International, Inc. to D from Ca/LD following the company's announcement that it has failed to make an excess cash flow payment to lenders of its first-lien bank credit facility on June 30.

All other ratings have been affirmed, the agency said.

The outlook is negative.

Moody's added that the rating action follows the company's announcement that the previously announced forbearance agreement, dated March 31, expired on June 30 and that Panolam would not fund the interest and excess cash flow prepayments due to first-lien lenders on this date.

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