On Dec. 16, 2008, Standard&Poor's Ratings Services lowered its ratings on Momentive Performance Materials Inc. and its subsidiaries by one notch, including its corporate credit rating on Momentive to 'B-' from 'B'. The outlook is stable. The recovery ratings remain unchanged. The downgrade reflects concerns that Momentive's heavy debt burden will make it difficult to generate positive free operating cash flow in the current weak economic environment. The company began experiencing lower demand for its products in the third quarter of 2008, and this has continued in the fourth quarter. We believe that operating conditions have deteriorated during the last several weeks as demand for all types of industrial products has slowed considerably both in and outside the
