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S&P provides BBB- to Evonik notes
S&P said it assigned a BBB- long-term issue rating to the proposed optionally deferrable, 60-year subordinated resettable fixed-rate notes to be issued by Evonik Industries AG (BBB+/stable/A-2).
The transaction remains subject to market conditions.
Evonik plans to use the issuance to help fund its acquisition of Huber's Silica business for $630 million. The agency said it will classify the proposed securities as having minimal equity content until the acquisition closes, which it anticipates in the second half of 2017, and will treat them as 100% debt.
S&P assesses the proposed notes as having minimal equity content initially because Evonik will have the option to call the hybrid if the acquisition of Huber's Silica business is terminated. Following the closure of the transaction, which it anticipates in the second half of 2017, the agency will classify the proposed notes as having intermediate equity content.
The BBB- issue rating on the notes reflects their subordination and optional interest deferability.
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