Moody's downgrades Kronos

Moody's Investors Service said it lowered Kronos International, Inc.'s corporate family and probability-of-default ratings to Caa1 from B2 and the €400 million senior secured notes due 2013 to Caa2 (LGD5, 71%) from B3 (LGD5%, 72%).

The downgrade reflects expectations that the company will not generate positive free cash flow in the first half of 2009, its weak liquidity and the potential that the company will need to seek relief under its revolving credit facility's financial covenants, according to the agency.

Ratings are under review for downgrade, reflecting the potential that the company will need to seek relief under its revolving credit facility's financial covenants, continuing uncertainty regarding 2009 performance and industry conditions, and the potential for a further decline in liquidity the agency said.

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