Moody's lowers Walter Industries

Moody's Investors Service said it lowered Walter Industries, Inc.'s corporate family rating to B1 from Ba3 and the senior secured bank credit facilities to B1 (LGD3, 47%) from Ba2.

The outlook is negative.

Moody's said the downgrade was prompted by the decline in cash flow from Walter's home mortgage finance business and the company's increased reliance on the volatile coal mining business.

The negative rating outlook reflects the view that homebuilding, subprime mortgage and mortgage-backed securitization market conditions will remain challenging for the next 12 to 18 months and that there is more downside than upside risk at this time, the agency said.

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