Moody's may cut Oglebay

Moody's Investors Service said it placed on review for downgrade Oglebay Norton Co.'s B1 corporate family and probability-of-default ratings, its B1 $55 million guaranteed senior secured revolving credit facility and $140 million guaranteed senior secured term loan B, and SGL-2 speculative grade liquidity rating.

The review was prompted by Harbinger Capital Partners' announcement that it began a tender for Oglebay's shares at $31 per share in cash. Harbinger's tender offer represents a significant premium over the share trading price the past 30 days and raises the probability that Oglebay will be sold with potentially adverse consequences for pro forma leverage, the agency said.

Moody's said its review will focus on the outcome of Oglebay's strategic review, the progress of Harbinger's tender offer or any other competing acquisition bid, the pro forma leverage and credit metrics that may result from a buyout, and Oglebay's business fundamentals and liquidity.

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