Moody's drops Zlomrex

Moody's Investors Service said it has downgraded Zlomrex SA corporate family rating to Caa3 from Caa1 and the rating of the secured long-term € 170 million bond to Ca.

The outlook is negative.

According to Moody's, the rating action was prompted by:

• The continued weak results, which Zlomrex has reported for the last quarter 2008 and the first quarter 2009 in addition to the bleak outlook for the current quarter;

• The lack of progress in extending the tenor of its bank facilities, which had been built by the agency in its existing rating;

• The failed integration and continued loss-making situation at its Croatian steel mill Zeljezara Split; and

• The currency risk to which Zlomrex is exposed with the outstanding eurobond.

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