Fitch Downgrades Georgia Gulf's IDR to 'RD'

Business Wire, June 16, 2009

NEW YORK -- Fitch Ratings has downgraded Georgia Gulf Corp.'s (NYSE: GGC) Issuer Default Rating (IDR) to 'RD' from 'C' following its announcement of an extension of its exchange offer until July 1, 2009. Georgia Gulf simultaneously announced that it has obtained extended forbearance agreements to ensure that indebtedness under its notes may not be accelerated prior to July 15, 2009 due to failure to make the $34.5 million of interest payments due April 15, 2009. Earlier Georgia Gulf obtained an amendment under its senior secured credit agreement that allows the company to continue to withhold the interest payments without constituting a default under the credit agreement until the earlier of July 15, 2009 or the first day note holders may accelerate the indebtedness under such notes. Georgia Gulf also announced that it has withheld interest payments on the 2013 notes in the amount of $3.6 million due June 15 and subject to a 30-day grace period.

The downgrade reflects Fitch's view that Georgia Gulf has experienced an uncured payment default on a bond, loan or other material financial obligation but which has not entered into bankruptcy filings, administration, receivership, liquidation or other formal winding-up procedure, and which has not otherwise ceased business due to the extension of multiple waivers or forbearance periods upon a payment default on one or more material financial obligations.

Fitch has also affirmed Georgia Gulf's debt ratings as follows:

--Senior secured credit facility at 'B-/RR1';

--Senior unsecured notes at 'C/RR6';

--Senior subordinated notes at 'C/RR6'.

Should the exchange prevail in full, interest expense would be reduced by about $38 million annually and debt net of cash would be reduced by $530 million. The exchange incorporates payment of accrued interest on the notes in cash.

At March 31, 2009, Georgia Gulf had cash on hand of roughly $65 million and $35.9 million available under its revolver. At that time, $172.5 million was drawn under the revolver, $349.5 million was outstanding under the term loan B due 2013, the face amount of the senior notes was $600 million, and the face amount of the senior subordinated notes was $200 million.

Based in Atlanta, Georgia Gulf is a commodity chemicals producer. Its product portfolio includes VCM, PVC resin, vinyl compounds, cumene, acetone, phenol, window and door profiles and moldings as well as outdoor building products. Georgia Gulf earned approximately $174 million of EBITDA from continuing operations on sales of $2.9 billion in 2008.

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