S&P cuts Citation to D

Standard & Poor's said it lowered its corporate credit and secured bank loan ratings on Citation Corp. to D from B- after the company announced that it had filed for Chapter 11 protection in U.S. Bankruptcy Court because of high raw material costs.

S&P also placed its 3 recovery rating on Citation's $320 million senior secured bank facility on CreditWatch developing.

S&P said Citation was highly leveraged despite a financial restructuring completed in December 2003 that effectively reduced the company's debt burden by $136 million. The casting industry is fragmented, highly capital-intensive, and subject to volatile demand, customer pricing pressures, and fluctuations in raw material prices.

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