Moody's may up SGL Carbon

Moody's Investors Service said it placed the ratings of SGL Carbon AG on review for possible upgrade.

Affected ratings include the senior implied rating of SGL Carbon AG at B2; the unsecured issuer rating of Caa2; the €227 million in senior secured credit facilities due 2008 at SGL Carbon AG and certain of its subsidiaries at B2; the $116 million in senior secured credit facilities due 2009 at SGL Carbon LLC at B2; and the €270 million in senior notes due 2012 at SGL Carbon Luxembourg SA at Caa1.

Moody's said the rating action is prompted by i) the announcement that SGL Carbon has disposed of its loss-making Surface Protection business which generated about €120 million of turnover in 2004 and ii) the strong improvement in the group's financial performance during the first nine months of 2004 versus 2003 following improved market conditions and successful implementation and realization of its cost savings program.

Moody's noted that although SGL Carbon will have to book a €58 million write-down at year-end 2004, this will have no negative impact on the group's financial covenants. The rating agency also positively recognizes the fact that €30 million of pension liabilities have been acquired by the new owners of this business.

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