Moody's ups GrafTech liquidity rating

Moody's Investors Service said it raised GrafTech International Ltd.'s speculative grade liquidity rating to SGL-2 from SGL-3.

Moody's said the upgrade reflects the company's improved cash position, $66 million as of March 31, 2004, and the liquidity provided by its €175 million revolving credit facility. The credit facility is currently unused, except for letters of credit, and access to the facility is unlikely to be limited by any of the company's debt covenants.

Moody's expects GrafTech to have breakeven free cash flow over the next 12 months before taking into account possible asset sales. The fundamentals for all of its businesses are favorable, its plants are operating at a high level, and graphite electrode price increases are firmly established for 2004.

As a result, the company is expected to improve on 2003 EBITDA and cash from operating activities, which were $103 million and negative $25 million, respectively. In addition, the October 2003 issuance of equity and subsequent repayment of $190 million of bank debt, and the first quarter 2004 prepayment of European Union antitrust fines and the refinancing of accounts receivable factoring, have strengthened GrafTech's liquidity.

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