Moody’s Investors Services lowered two credit ratings for building materials company USG Corp. Thursday, citing a dim outlook for the building sector.
Moody’s lowered its corporate family and probability of default ratings for USG to “Caa1″ from “B3.” It also downgraded guaranteed senior unsecured notes due 2014 to “B2″ from “B1″ and other senior unsecured debt to “Caa2″ from “Caa1.”
The ratings agency said that USG has low capacity utilization rates at its gypsum manufacturing facilities and that demand for gypsum board and other building materials won’t be enough for USG to cover its intermediate term interest expenses.
Finally, Moody’s said the nonresidential construction market is expected to continue contracting into next year. That could pose a problem for USG, which makes 30 percent of its revenue from that market.
Company shares fell 43 cents, or 3 percent, to $13.99 in afternoon trading.
