Moody's lowers Georgia Gulf

Moody's Investors Service said it downgraded Georgia Gulf Corp.'s corporate family and probability-of-default ratings to B1 from Ba3, senior unsecured notes to B2 (LGD5, 76%) from B1 (LGD4, 67%) and senior subordinated notes to B3 (LGD6, 95%) from B2 (LGD6, 93%). The guaranteed senior secured revolving credit facility due 2011 and term loan due 2013 were confirmed at Ba2 (LGD2, 27%).

The outlook is stable.

The agency said the downgrade reflects the greater-than-anticipated negative impact of the downturn in the U.S. housing market on the company's financial performance in the fourth quarter of 2006, the expectation that 2007 results will be materially weaker than previously anticipated and, therefore, that the company will take longer to restore financial metrics to levels that will adequately support a Ba3 corporate family rating.

The affirmation of the senior secured credit facilities reflects the significant debt reduction in these facilities since the acquisition of Royal Group Technologies Ltd. in October, which Moody's said was large enough to offset the negative impact of the downgraded corporate family rating.

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