Moody's cuts Werner loans to B3, notes to Caa2

Moody's Investors Service said it assigned a Caa1 rating to the proposed new $100 million senior secured second-lien term loan to Werner Holding Co., Inc. The outlook is stable.

Additionally, Moody's downgraded all of the debt ratings for the company, including the senior implied rating to B3 from B2, $50 million senior secured revolving credit facility due 2008 and $165 million senior secured term loan due 2009 to B3 from B2 and $135 million 10% senior subordinated notes due 2007 to Caa2 from Caa1.

Moody's said the downgrade reflects the concern related to the pace and timing of the company's rebuilding efforts post the loss of the Home Depot business, particularly in light of the competitive environment, high raw material prices and the company's competitive cost structure.

Proceeds from the second lien term loan will be used to repay $26.7 million drawn on the company's revolver, to satisfy $65 million of 2005, 2006 and 2007 amortization requirements of the existing senior credit facility, and to fund various other fees and expenses.

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