S&P downgrades Werner

Standard & Poor's said it lowered Werner Holding Co. Inc.'s corporate credit rating to CCC from CCC+, senior secured first-lien debt with a recovery rating of 1 to CCC+ from B-, senior secured second-lien debt with a recovery rating of 3 to CCC- from CCC and senior subordinated notes to CC from CCC-. The outlook is negative.

S&P said the downgrade reflects further concerns about Werner's liquidity and its exposure to high aluminum prices, which have risen by about $0.30 per pound since the end of the third quarter of 2005. The agency predicted that that high aluminum prices will continue to use Werner's available liquidity, which was $43 million as of Sept. 30, elevating the likelihood of a payment default of its debt obligations.

The ratings on Werner Holding reflect the company's significant customer concentration risk, the competitive environment in its niche and cyclical markets, volatile raw-material costs, a very aggressive financial profile, significant negative free cash flow, deteriorating liquidity and refinancing risks, the agency said.

Total debt to EBITDA is expected to be about 10x for 2005.

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