Moody's downgrades Wolverine Tube

Moody's Investors Service said it downgraded Wolverine Tube, Inc.'s corporate family rating to Caa2 from Caa1 and the company's $135 million 7 3/8% guaranteed senior unsecured notes due 2008 and $99 million 10½% guaranteed senior unsecured notes due 2009 to Caa3 (LGD4, 62%) from Caa2.

The outlook is negative.

The downgrade follows Wolverine's announcement of a restructuring and reorganization program that will involve a debt-for-equity exchange offer to the company's current noteholders. If the company does not receive enough support for this offer, Wolverine intends to pursue a prepackaged bankruptcy plan.

The downgrade reflects Moody's opinion concerning the impact of the restructuring program on noteholders' ultimate recovery as well as the overall financial strength of Wolverine. Industry competitive dynamics, volatility of raw material prices and Wolverine's liquidity were also considered in the assessment of the company's ratings and rating outlook.

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