Moody's drops Euramax to Caa1

Moody's Investors Service said it downgraded the long-term ratings of Euramax International, Inc. corporate family rating to Caa1 from B2, first-lien senior secured term loan and revolver to B3 (LGD3, 34%) from B1 and second-lien senior secured term loan to Caa2 (LGD5, 80%) from Caa1.

Euramax Netherlands BV's first-lien senior secured term loan and revolver were downgraded to B3 (LGD3, 34%) from B1.

The outlook is negative.

The agency said it believes there is substantial risk the company will violate its financial covenants in the third quarter due to growing softness in the company's end-markets, particularly within its European operations and building products segment.

The negative outlook reflects weakness in the domestic recreational vehicle market and certain construction markets and margin erosion, the agency noted.

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