Moody's cuts Wolverine Tube

Moody's Investors Service said it downgraded Wolverine Tube Inc.'s corporate family and probability-of-default ratings to Caa3 from Caa2 and its 10½% guaranteed senior unsecured notes due 2009 to Ca (LGD4, 68%) from Caa3 (LGD4, 63%).

The outlook remains negative.

The agency said the downgrade reflects increasing refinancing risk ahead of substantial debt maturities in early 2009. While Wolverine continues to execute on the recapitalization plan and believes it will be able to execute on the refinancing plan, in Moody's opinion, the refinancing risk has been heightened by the adverse credit market conditions. This in turn is compounded by the agency's view that the company's ability to raise capital through asset sales is very limited due to the numerous divestitures over the last several years.

From the business profile perspective, Moody's said it remains concerned about the company's future operating prospects and continued fundamental deterioration given that some of Wolverine's copper tubing products are used in residential heating, ventilation and air-conditioning, refrigeration and appliances.

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