Moody's lowers CPG to SGL-3

Moody's Investors Service said it lowered the speculative-grade liquidity rating of CPG International Inc. to SGL-3 from SGL-2 to reflect the contractual tightening of covenants set to begin in June 2012.

Moody's also said it affirmed the B2 corporate family rating and probability of default rating, along with the B2 rating on the $285 million first-lien term loan due 2017.

The outlook remains stable.

The downgrades reflect an expectation that CPG will maintain an adequate liquidity profile over the next 12 months, Moody's said.

The agency said it currently expects CPG to maintain compliance over this period. But, weaker-than-anticipated EBITDA performance and less than previously anticipated debt reduction in 2011 have reduced the expectation for covenant headroom, particularly in March 2013 when CPG typically accesses its revolver to fund working capital build for its early buy program, Moody's said.

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