Moody's cuts Korreden to Caa1

Moody's Investors Service said it downgraded to Caa1 from B2 the corporate family and probability-of-default ratings of Korreden SA, which is the ultimate holding company for Akerys.

The agency downgraded €300 million of senior floating-rate notes due 2014 issued by Akerys Holdings SA, a finance subsidiary of Korreden, to Caa2 (LGD5, 78.05%) from Caa1. Ratings remain on review for further downgrade.

"The rating downgrades reflect the expected further weakening of the company's financial metrics, as Moody's perceives a more severe downturn in the French buy-to-let housing market as consumer confidence further erodes," Lynn Valkenaar, a Moody's vice president, said in a written statement.

Korreden's Caa1 rating reflects the changed market conditions on Akerys's sales volumes, despite its leading position in the buy-to-let segment of the homebuilding market and good geographic diversification, the agency said.

It also reflects the group's lack of financial flexibility due to high leverage, the agency noted.

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