Moody's downgrades USEC ratings

AP News
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Posted: Dec 18, 2009 4:46 PM

Moody's Investor Service on Friday downgraded its ratings for USEC Inc., citing expectations of weak credit metrics over the next several years, increased competition and liquidity risks.

The company, which is based in Bethesda, Md., is a global supplier of low enriched uranium for nuclear power plants.

The ratings agency lowered the company's corporate family and probability of default ratings to Caa1 from B3. It also cut the rating for its 3 percent convertible senior notes to Caa2 from Caa1. All new ratings are considered junk grade.

In addition to concerns over credit, competition and liquidity, Moody's said the ratings are also constrained by USEC's dependence on a single production facility, regulatory risk and the potential for higher costs of electric power, which accounts for up to 75 percent of the company's costs to enrich uranium.

Shares of the company fell 4 cents to $4.02 in afternoon trading.