Moody's assigns Chemtura notes B1

Moody's Investors Service said it assigned a B1 rating to Chemtura Corp.'s proposed senior unsecured notes due 2021.

The proceeds from the proposed notes, along with existing balance sheet cash, will be used to pay for the portion of its outstanding 7 7/8% senior unsecured notes due 2018 that were successfully tendered and fees associated with the tender process. The firm is also prepaying $50 million of its term loan B due 2016.

The outlook is stable.

Chemtura is taking advantage of the low interest rate environment to refinance high coupon debt. The notes due 2018 are not currently callable, so the firm tendered for the notes, receiving tenders with respect to approximately $354 million aggregate principal amount of notes.

It also has elevated cash balances that can be used to pay fees and costs associated with the tender process, as a result of selling its Antioxidant and UV Stabilizer business in May 2013, for $200 million (including certain liabilities).

Moody's said the refinancing will not materially impact the firm's leverage, but lowers its interest expense.

Leverage was 3.6 times as of March 31, including the agency's analytical adjustments, which add $530 million to debt for unfunded pensions and operating leases (prior to its most recent divestiture).

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