Moody's cuts corporate family rating of Chemtura

Moody's cut the corporate family rating to "B1" from "Ba2." The outstanding debt ratings were lowered to "B1" from "Ba2" as well. The two-notch downgrades move Chemtura's ratings further into junk status.

The ratings cut reflects the company's high leverage, weak credit metrics and ongoing challenges in one of the company's business segments, Moody's said in a statement.

Moody's also said an upcoming debt maturity of $370 million in July is of concern for Chemtura because of the ongoing problems in the credit markets.

Moody's noted the company is working toward improving its liquidity and reviewing possible options to increase cash amid the downturn in the credit markets, including reducing inventory, cutting capital spending, selling assets and suspending its dividend.

If Chemtura struggles to refinance the credit line before it expires, it could also tap an existing committed revolving credit line that expires in 2010, Moody's said.

The outlook for the ratings is stable.

Shares of Chemtura fell 15 cents, or 8.5 percent, to $1.62 in afternoon trading.