Moody's lowers Milacron ratings

Moody's Investors Service said it downgraded all ratings of Milacron Inc. and its subsidiaries with the exception of the senior secured revolving credit facility rating which was unchanged. The ratings were additionally all placed on review for possible further downgrade.

Moody's downgraded the rating of Milacron's $115 million of 8.375% non-guaranteed senior unsecured notes due March 2004 to Caa2 from Caa1; Milacron Capital Holdings BV's €115 million of 7.625% senior unsecured Eurobond notes (guaranteed by Milacron) due April 2005 to Caa2 from Caa1; Milacron's senior implied rating Caa1 from B3; and Milacron's senior unsecured issuer rating to Caa2 from Caa1. Moody's also affirmed the B3 rating of Milacron's $65 million remaining non-guaranteed senior secured revolving credit facility due March 15, 2004.

Moody's said the review reflects Moody's escalating concerns regarding the lack of clarity regarding the company's capability of refinancing an aggregate $220 million of debt commitments scheduled to mature by March 15, 2004, along with the company's 2003 operating results which fell well short of the plan provided by management at the beginning of the year.

Milacron's management has stated that its top priority is the negotiation and evaluation of various refinancing options for the company that are being discussed with both current and prospective lenders.

The company has publicly acknowledged that all of the various refinancing options under consideration are likely to result in significant dilution to the current holders of the stock. Depending upon the percentage of equity that is ultimately issued to restructure the balance sheet, the refinancing could potentially require shareholder approval.

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