S&P drops Kemet notes to B-

Standard & Poor's said it lowered its corporate credit rating on Kemet Corp. to B- from B+.

The outlook is negative.

At the same time, S&P lowered its issue-level rating on the company's senior secured notes to B- (the same as the corporate credit rating) from B+. The 4 recovery rating remains unchanged and indicates the expectations of average (30% to 50%) recovery for lenders in the event of a payment default.

"The downgrade is based on continued top-line and margin pressures and lagging results from the restructuring of the Film & Electrolytic [F&E] business, which combined with cyclical weak end-market demand, has resulted in sustained, elevated leverage well in excess of 5x, persistent negative FOCF, and diminishing liquidity," S&P credit analyst Alfred Bonfantini said in a news release.

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