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Moody's lowers U.S. Concrete
Moody's Investors Service said it downgraded U.S. Concrete's corporate family and probability-of-default rating to Caa1 from B2, its senior subordinated notes to Caa2 from B3 and its speculative grade liquidity rating to SGL-4 from SGL-2.
The outlook was changed to negative from stable.
The downgrades reflect continued volume deterioration of ready-mixed concrete and pre-cast concrete, resulting from weak construction activity across all market segments, according to the agency.
The action also reflects weakened liquidity and the potential for credit agreement covenant violations in 2010, Moody's said.
The Caa1 corporate family rating reflects the high cyclicality of the company's business and end markets, high financial leverage and low profitability, heavy reliance on a single product, lack of vertical integration, high fixed cost structure and current pricing pressures, the agency said.
The rating is supported by the company's geographic diversification and strong presence in markets with favorable long-term growth prospects, the agency noted, as well as by its exposure to the public infrastructure and street and highway construction market.
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