S&P ups GrafTech, rates loan B+

S&P said it raised its corporate credit rating on GrafTech International Ltd. to B+ from B.

The outlook is stable.

At the same time, the agency assigned a B+ issue-level rating to the company's new $1.5 billion senior secured term loan due 2025. The recovery rating is 3, indicating an expectation for meaningful (50%-70%; rounded estimate: 50%) recovery in the event of a payment default.

S&P said the upgrade reflects the material amount of additional medium-term contracts GrafTech signed in December and January.

“Given the certainty of these cash flows over the next few years–even despite the significant increase in outstanding debt associated with the company's $1.5 billion term loan issuance to largely fund a shareholder dividend–we continue to expect GrafTech's adjusted leverage to fall below 2x by year-end 2018,” the agency said in a news release.

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