S&P lowers Montichem view to negative

S&P said it revised the outlook on Monitchem Holdco 2 SA, the holding company for CABB International GmbH, to negative from stable.

The agency also said it affirmed CABB’s B long-term corporate credit rating.

S&P also said it affirmed the BB- rating on CABB's €100 million super senior revolving credit facility. The recovery rating of 1 is unchanged, indicating 90% to 100% expected default recovery.

The agency also said it affirmed the B rating on the €410 million senior secured notes. The recovery rating of 4 is unchanged, indicating 30% to 50% expected default recovery.

S&P also said it affirmed the CCC+ rating on the €175 million senior unsecured notes. The recovery rating of 6 is unchanged, indicating 0 to 10% expected default recovery.

The outlook revision reflects the significant deviation of CABB's credit metrics from levels viewed as commensurate with a B rating, the agency said.

S&P said it forecasts a ratio of adjusted funds from operations-to-debt of 6.5x to 7.0x at year-end 2016, mainly based on the current weakness in the agrochemicals and crop-protection markets and the resulting lower volumes in 2015 that will likely persist this year.

This ratio compares with 6.4x in 2015 and a level of 6x or les that works with the current rating.

But, the stable performance of the company's acetyls business unit is noted, S&P said, and the company’s profitability will likely benefit from completion of its pipeline- and efficiency-projects in the next few years.

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