Moody's lowers G Steel

Moody's Investors Service said it downgraded the corporate family and senior unsecured ratings of G Steel Public Co. to Ca from Caa3.

The outlook is negative.

"The downgrade reflects Moody's concern regarding G Steel's very tight liquidity, weak asset coverage and high probability of default," Kathleen Lee, a Moody's vice president, said in a statement.

"In the wake of the dramatic deterioration in G Steel's business operating environment, there has been a sharp decline in demand and prices for the company's processed steel products; this has caused a significant erosion of cash flow generation and very tight liquidity," Lee said.

The downgrade to Ca therefore reflects the low expected recovery rate for bondholders, the agency said.

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