S&P reviews Kerling; rates Inovyn, loans B

Standard & Poor's said it assigned its preliminary B long-term corporate credit rating to Inovyn Ltd., a manufacturer of polyvinyl chloride (PVC) and other chlorine derivatives.

The outlook is stable.

At the same time, S&P placed its B- long-term corporate credit rating on Inovyn's operating subsidiary Kerling plc on CreditWatch with positive implications.

The agency assigned a preliminary B issue rating to Inovyn's proposed €240 million term loan A and up to €835 million term loan B. The recovery rating on these facilities is 3, indicating an expectation of recovery prospects for creditors in the higher half of the 50%-70% range in the event of payment default.

S&P also placed its B- issue ratings on Kerling's €785 million senior secured fixed-rate notes on CreditWatch positive. The recovery rating is unchanged at 4.

Finally, the agency withdrew its issue and recovery ratings on Kerling's €75 million senior secured notes, following their full repayment in December 2015.

Formed on July 1, 2015, Inovyn is a 50/50 joint venture between Ineos and Solvay. Following the settlement of a €335 million payment related to the early exit of Solvay from the joint venture, pending approval from the competition authorities, Inovyn will be ultimately fully owned by Ineos AG.

Proceeds from the new loans will refinance €785 million of debt Kerling and settle a €335 million payment to Solvay related to its early exit from the joint venture.

The CreditWatch placement on Kerling reflects S&P’s expectation that it will equalize the rating on Kerling with that on Inovyn after the refinancing transaction is completed.

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