New York, November 21, 2012 -- Moody's has affirmed both the CFR and PDR at B2 but changed the outlook for Dynacast International LLC ("Dynacast") to negative from stable to reflect the ongoing material weakness in internal controls over financial reporting. Concurrently, Moody's has assigned a speculative grade liquidity rating (SGL) of SGL-3 to Dynacast reflecting adequate liquidity.

Assignments:

..Issuer: Dynacast International LLC

.... Speculative Grade Liquidity Rating, Assigned SGL-3

Outlook Actions:

..Issuer: Dynacast International LLC

....Outlook, Changed To Negative From Stable

Affirmations:

..Issuer: Dynacast International LLC

CFR affirmed at B2 PDR affirmed at B2 Adjustments: ..Issuer: Dynacast International LLC

....Senior Secured Bank Credit Facility, Changed to LGD1-04% from LGD1-06 %

....Senior Second Lien Notes, Changed to LGD4-51% from LGD4-54%

RATING RATIONALE

The company's negative outlook reflects Dynacast's weak interest coverage and poor free cash flow metrics for the B2 rating. EBIT to interest coverage was 1.4 times for the LTM period ended September 30, 2012 on a Moody's adjusted basis while EBITDA to interest was 2.1 times. Also adversely impacting the company's rating outlook is the still pending resolution of its financial reporting and control problems.

The assignment of an SGL-3 rating reflects its adequate liquidity. As of September 30, 2012, Dynacast had $22 million of cash and cash equivalents in addition to $46 million of available borrowing capacity under its $50 million revolving credit facility maturing in July 2016.

Dynacast is currently in compliance with the leverage and interest coverage covenants in its credit facilities. The SGL rating reflects the deficiencies in internal control over financial reporting described in the company's recent 10-Q filing. Dynacast has stated that it continues to address the material weaknesses and anticipates its remedial actions will sufficiently strengthen its internal control over financial reporting. However, it further states that because some actions have only recently been undertaken and others will occur over the next several months, it will be unable to determine if the material weakness that have been identified are remediated until after it completes its fiscal year ended December 31, 2012.

What could pressure the ratings

If the material weakness in the company's financial reporting and control is not cured in the next audit, if the company's debt to EBITDA were to increase above 5.5 times, or if EBITDA to interest coverage were to decline below 2.0 times the ratings could be pressured. The company's European operations have been weak. A decrease in it consolidated year over year revenue could also pressure the ratings particularly if it is accompanied by margin contraction.

What could cause positive ratings traction

Positive ratings traction would be supported by EBITDA to interest coverage above 3.5 times and leverage under 4.0 times, both on a sustained basis, in conjunction with strengthening in other related metrics.

The principal methodology used in rating Dynacast was the Global Manufacturing Industry Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.

Dynacast, headquartered in Charlotte, North Carolina, is a global manufacturer of small engineered precision die cast components. Revenues for the LTM period ended September 30, 2012 were $494 million.

REGULATORY DISCLOSURES

The Global Scale Credit Ratings on this press release that are issued by one of Moody's affiliates outside the EU are endorsed by Moody's Investors Service Ltd., One Canada Square, Canary Wharf, London E 14 5FA, UK, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that has issued a particular Credit Rating is available on www.moodys.com.

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Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery.

Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history. The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

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Paul Aran Vice President - Senior Analyst Corporate Finance Group Moody'sInvestors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653Michael J. Mulvaney MD - Corporate Finance Corporate Finance Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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