S&P: GrafTech view to negative

Standard & Poor's said it revised the outlook on GrafTech International Ltd. to negative from stable.

The agency also said it affirmed the company's BB+ corporate credit rating.

The rating on the company's senior unsecured debt is unchanged at BB+ with the recovery rating remaining at 4, indicating 30% to 50% expected default recovery.

The negative outlook reflects that the company's debt-to-EBITDA ratio increased to 4.6x from 2.5x in 2013, the agency said.

While S&P said it does not expect a return to previous levels of leverage within the next year, the agency believes that rationalization initiatives should bring profitability levels back in line with historical norms by the end of 2014 and leverage levels will begin to fall.

The revised outlook reflects the uncertainty in profitability levels following the rationalization initiatives, as well as the possibility that the company's increased sensitivity to soft-end markets may represent a shift in the graphite electrode industry, S&P said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.