Moody's rates Columbian Chemicals loans Ba3

Moody's Investors Service said it assigned a Ba3 corporate family and probability-of-default ratings to Columbian Chemicals Acquisition LLC and Ba3 ratings (LGD3, 46%) to the proposed $75 million revolving credit facility due 2015 and $300 million term loan A due 2015.

The outlook is stable.

Proceeds will be used to repay the outstanding balances of Columbian Chemicals' term loan A, term Loan B and drawn amounts under various overseas subsidiaries' bank facilities. The revolver is not expected to be drawn upon the close of the refinancing transaction.

The Ba3 corporate family rating is supported by the stable nature of the carbon black business, the company's moderate leverage with a pro forma debt-to-EBITDA ratio of 2.7x as of June 30 and good liquidity, according to the agency.

Columbian Chemicals benefits from strong market positions as one of the top three global producers, long-term stable customer relationships, strong current carbon black market conditions and geographic diversity with production assets in all major regions, the agency said.

Ratings also reflect the limited product diversity, commodity nature of the majority of the company's carbon black business, meaningful customer concentration, and exposure to energy and petroleum-based feedstock costs, the agency noted.

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