Moody's might downgrade Styrolution

Moody's Investors Service said it placed Styrolution Group GmbH’s B1 corporate family rating, B1-PD probability of default rating and B1 senior secured notes rating under review for downgrade following the announcement that Ineos Industries Holdings Ltd. will acquire BASF SE's 50% share in Styrolution, which is a joint venture between the two companies.

The agency said its review will evaluate the credit implications of the acquisition, any potential new capital structure put in place and any changes in the company's liquidity profile, strategic objectives and financial policy of management now that they will be fully under Ineos' control.

Styrolution's B1 corporate family rating reflects the challenging trading environment in Europe and in the Asian polystyrene and ABS markets, exposure to feedstock price volatility, lack of product diversification and heightened substitution threat for its polystyrene and ABS products, Moody’s said.

However, Styrolution benefits from a leading global market share position in the styrenics market based on capacity, cost leadership position, certainty of supply of key raw materials and history of a conservative financial policy with low leverage, the agency said.

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