S&P downgrades GrafTech

Standard & Poor’s said it lowered the corporate credit rating on GrafTech International Ltd. one notch to B+ from BB-.

The rating remains on CreditWatch with negative implications, where it was placed in May.

S&P also said it lowered the rating on the company’s $300 million senior unsecured notes one notch to B+ from BB-, in line with GrafTech’s corporate credit rating, and kept the rating on CreditWatch with negative implications.

The recovery rating on the unsecured notes remains at 4, indicating 30% to 50% expected default recovery.

The downgrades reflect a view that GrafTech’s credit measures are under pressure and are commensurate with a highly leveraged financial risk profile due to persistent weakness in the global steel market, S&P said.

The ratings remain on CreditWatch, reflecting the potential for a downgrade due to the possibility that GrafTech might have to repurchase its $300 million senior unsecured notes if it comes under new ownership and a downgrade event is triggered, as defined in the debt’s indenture, the agency said.

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