Moody's ups China Glass to Caa2

Moody's Investors Service said it affirmed the Caa1 corporate family rating of China Glass Holdings Ltd., and upgraded its senior unsecured rating to Caa2 from Ca.

The outlook remains negative.

The action follows the completion of China Glass' offer to repurchase $39.11 million of its senior notes due 2012 at $0.50 to the dollar.

The affirmation considers the fact that the transaction has not materially improved China Glass' financial profile, given the modest reduction in leverage, Moody's said.

The rating continues to reflect China Glass' high financial leverage, with projected pro-rata consolidated debt-to-EBITDA of about 7x to 8x in 2009, weak operating performance and aggressive financial management, the agency said, balanced by its leading position in China's highly fragmented glass manufacturing market.

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