Moody's cuts MMI Products ratings

Moody's Investors Service said it lowered the senior implied rating of MMI Products Inc. to B3 from B2, the issuer rating to Caa1 from B3, and the rating on the 11.25% and 13% senior subordinated notes, both due 2007, to Caa2 from Caa1.

The outlook is negative.

Moody's said the downgrades were prompted by MMI's substantial and growing debt leverage, margin pressures, weakened debt protection measures, and the greater proportion of secured debt in its capital structure.

The negative ratings outlook reflects Moody's expectation that commercial construction markets will remain weak into 2004, concern that additional acquisitions would further burden an already highly leveraged balance sheet, and the possibility that EBITDA could continue being adversely affected into 2004 by rising steel rod costs, if the company is unable to raise prices.

Moody's said the ratings are supported by MMI's number one or number two share of market in each of its major segments, its extensive distribution network, its substantial raw material purchasing power of steel rod, and its free cash flow generating ability in a more normal operating environment.

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