Moody's lowers Kinetek, view negative

Moody's Investors Service said it downgraded the ratings of Kinetek Inc. and its outstanding debt obligations and the outlook has been changed to negative from stable.

Affected ratings include the company's $15 million of 5% senior secured notes due April 2007 to B3 from B2, $11 million of 10% senior secured notes due April 2007 to B3 from B2 and $270 million of 10.75% series D senior unsecured notes due 2006 to Caa3 from Caa1.

The corporate family rating has been lowered to Caa1 from B3, the agency said.

Moody's noted the rating action and change in outlook reflect the heightened refinancing risk posed by the pending maturity of the company's senior unsecured notes, high existing debt levels, current and projected negative free cash flow generation and continued margin pressure due to the prospect of raw material costs continuing to rise at a rate higher than achievable price increases.

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