Moody's drops Werner

Moody's Investors Service said it downgraded all of the debt of Werner Holding Co., Inc.

The change in the ratings reflects Moody's concerns related to the company's ability to raise prices sufficiently to offset higher manufacturing and shipping costs.

The outlook was changed to negative from stable.

Affected ratings $50 million senior secured revolving credit facility due 2008, lowered to Caa1 from B3, $90 million senior secured term loan due 2009, lowered to Caa1 from B3, $100 million senior secured second-lien term loan, due 2009, lowered to Caa2 from Caa1, $134 million of 10% senior subordinated notes due 2007, lowered to Caa3 from Caa2, and corporate family rating, lowered to Caa1 from B3.

Moody's said the downgrade in the ratings reflects the company's high leverage, weak cash flow generation, challenging competitive environment and difficulty in passing through higher raw material prices.

The company's ratings consider Werner's market share, strong brand recognition and diversified customer base, the agency noted.

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