Moody's cuts Yioula

Moody's Investors Service said it downgraded the corporate family and probability of default ratings of Yioula Glassworks SA to Caa2 from Caa1, along with the rating on its €140 million senior unsecured notes to Caa3 (LGD 4, 69%) from Caa2.

The outlook is negative.

The ratings reflect increasing risk to the company's liquidity profile given that Yioula has been so far unable to term out sizeable debt maturities due by the end of September 2011, Moody's said.

The agency said that Yioula remains reliant on its ability to roll-over more than €80 million of short-term credit lines under which more than €70 million were outstanding as of June 2011 and which come up for renewal in the first half of 2012.

These banks could be challenged to extend their lending due to weak economic prospects and the austerity measures that the government is implementing, which could impair the capitalization of domestic banks, Moody's said.

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