Moody's downgrades MAAX

Moody's Investors Service said it downgraded MAAX Holdings, Inc.'s corporate family rating to Caa2 from B3, probability-of-default rating to Caa2 from B2 and 11.57% senior unsecured discount notes due 2012 to Caa3 (LGD6, 93%) from Caa1 and MAAX Corp.'s $150 million 9¾% senior subordinated notes due 2012 to Caa3 (LGD5, 75%) from Caa1.

MAAX Holdings' speculative grade liquidity rating was confirmed at SGL-4.

The outlook was changed to negative from stable.

The downgrade reflects Moody's negative outlook for the residential remodeling and homebuilding industries in North America and the difficulties this is likely to pose for MAAX as it attempts to improve its profitability, cash flows and comply with debt covenants.

On Jan. 9, 2007, MAAX obtained a $175 million term loan and a $40 million revolving credit facility. The new facilities, unrated by Moody's, contain a minimum monthly last-12-months adjusted EBITDA requirement and fixed charge coverage ratio, which will require monthly compliance. The agency predicted that MAAX will be challenged to maintain compliance with the monthly minimum EBITDA requirement of $36 million in this weak environment.

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