Moody's lowers Hayes Lemmerz

Moody's Investors Service said it downgraded the ratings of HLI Operating Co. Inc. (Hayes Lemmerz), including the corporate family rating to B3 from B1.

Other ratings downgraded include the $354.5 million senior secured first-lien term loan and $100 million senior secured first-lien revolver, both to B3 from B1, as well as the $150 million second-lien term loan to Caa1 from B2. The company's $161.7 million of outstanding senior unsecured notes were cut to Caa3 from B3.

The outlook is stable at the lower rating, reflecting an adequate liquidity profile in the short term.

The actions flow from the weak operating results and negative free cash flow of the company's first half, lowered guidance on EBITDA and free cash flow generation for the full year, and current levels of debt, which are above prior expectations. Consequently, coverage ratios have materially weakened and financial leverage has increased.

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