Moody's may downgrade CII Carbon

Moody's Investors Service said it placed CII Carbon LLC's B1 corporate family rating, B2 probability-of-default rating and B1 (LGD3, 33%) senior secured bank credit facility under review for possible downgrade following the announcement that Rain Calcining Ltd. will acquire CII for $595 million in an all-cash deal. The combination of these companies would create the world's largest producer of calcined petroleum coke, which is a necessary input in the production of aluminum.

The agency's review will focus on the capital structure and debt levels at CII following its acquisition by Rain as well as the strategic rationale and benefits associated with the acquisition. To the extent that the acquisition is materially debt financed at CII on a standalone basis, there could be a multiple-notch downgrade, Fitch noted.

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