Moody's drops Momentive PDR, notes

Moody's Investors Service said it downgraded Momentive Performance Materials Inc.'s probability of default rating to D-PD from Ca-PD and its springing-lien (second-lien) notes to C from Caa3.

The agency affirmed Momentive's corporate family rating at Ca, guaranteed secured first-lien notes at Caa1 and guaranteed secured 11/2-lien notes at Caa2.

These actions reflect the company's April 15 Securities and Exchange Commission filing that confirmed that Momentive voluntarily filed for protection under Chapter 11 of the U.S. Bankruptcy Code on April 14, entered into a Restructuring Support Agreement with key creditors who own roughly 85% of the second-lien debt and obtained a $570 million committed debtor-in-possession facility.

Moody's upgraded the company's speculative grade liquidity rating to SGL-3 from SGL-4 due to the bankruptcy courts approval of access to $430 million of the new $570 million DIP facility.

The outlook was changed to positive as the Restructuring Support Agreement should facilitate a restructuring of the company and allow it to exit bankruptcy later in 2014 with significantly lower debt.

Moody's also adjusted the loss given default assessments on the company's debt due to the new DIP facility and the filing of its 10-K on April 11.

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