S&P downgrades GrafTech

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

The outlook is stable.

The agency also said it lowered the rating on the company’s $300 million senior unsecured notes to B from B+ in line with the company’s corporate credit rating.

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

The downgrades reflect lower sales volumes and weaker pricing for graphite electrodes, which will continue to negatively affect GrafTech’s operating results and lead to weaker credit measures, S&P said.

The stable outlook reflects a view that despite expectations for continued weakness in the global steel market over the next 12 months, GrafTech has positioned itself to absorb this weakness through 2016, the agency said.

The company is expected to maintain an adequate liquidity, which should provide some cushion to operate in the current environment and maintain a B rating, S&P said.

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