Moody's downgrades General Cable

Moody's Investors Service said it downgraded General Cable Corp.'s corporate family rating to B2 from B1, probability of default rating to B2-PD from B1-PD, senior notes to B3 from B2, subordinated convertible notes to Caa1 from B3 and speculative grade liquidity rating to SGL-4 from SGL-3. The outlook remains negative.

The agency said the downgrade follows the company's announced restructuring program on July 9 and reflects disappointing operating results coupled with ongoing weak credit metrics. For the last 12 months ended in the first quarter, the ratio of adjusted debt to EBITDA increased to 6.7 times from 6.0 times at the end of 2013.

The negative outlook reflects lack of growth in key end markets, uncertain details and costs associated with the restructuring program and the company's stated commitment to return capital to shareholders in the face of operational weakness, Moody’s said.

Importantly, the agency said the negative outlook also accounts for the uncertain liquidity profile stemming from the 2015 notes maturity along with the springing maturity feature imbedded in the company's revolving credit facility.

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