Moody's cuts GrafTech view to negative

Moody's Investors Service said it changed the outlooks of GrafTech International Ltd. and GrafTech Finance, Inc. to negative from stable in response to the company's consistently negative free cash flow, high leverage and anticipated cost pressures.

While GrafTech is experiencing strong demand from the steel and aluminum industries and has been able to raise product prices, its financial performance has not met Moody's expectations. Even in the midst of very strong steel and aluminum markets, GrafTech still expects to have negative free cash flow in 2006.

Moving into 2007, Moody's is concerned about the potential for dramatically higher calcined petroleum coke costs due to tight global supplies.

Moody's affirmed GrafTech's B1 corporate family rating of B1, the $225 million 1.625% convertible debentures due 2024 at B2 and the speculative grade liquidity rating of SGL-2.

Moody's affirmed GrafTech Finance's Ba3 rating for the guaranteed senior secured revolving credit facility and the B2 rating for the $450 million 10.25% global notes due 2012.

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