Moody's reviews Mecachrome

Moody's Investors Service said it placed under review for downgrade Mecachrome International Inc.'s B2 corporate family and probability-of-default ratings, Ba2 (LGD1, 9%) senior secured and B3 (LGD4, 64%) senior subordinate ratings.

The agency affirmed the SGL-4 liquidity rating, indicating weak liquidity.

Moody's said the review follows Mecachrome's announcement that continued delays in aerospace programs would contribute to a shortfall in fiscal 2008 revenue and earnings below expectations.

The agency said Mecachrome believes the challenges are temporary and amendments were obtained for potential covenant violations through 2008, but that the earnings warning follows existing concerns over Mecachrome's liquidity position and its ability to stem its cash consumptiveness.

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