Moody's lowers Panolam

Moody's Investors Service said it downgraded Panolam Industries International, Inc.'s corporate family and probability-of-default ratings to Ca from Caa1, $168 million senior secured first-lien term loan due 2012 to Caa2 (LGD2, 24%) from B2 (LGD2, 25%), $30 million senior secured first-lien revolver due 2010 to Caa2 (LGD2, 24%) from B2 (LGD2, 25%) and $150 million 10¾% senior subordinated notes due 2013 to C (LGD4, 79%) from Caa2 (LGD5, 79%).

The outlook remains negative.

The Ca ratings reflect Moody's opinion that the probability of default has increased substantially as a result of the company's inability to amend, restructure or refinance its credit facilities following covenant violations at Dec. 31, according to the agency.

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