Moody's rates Kinove notes B2, loans Ba2

Moody's Investors Service said it assigned a B2 corporate family rating to Kinove German Bondco GmbH, a B2 rating (LGD4, 57) to the €355million 10% senior secured notes due 2018 and to the $350 million 9 5/8% senior secured notes due 2018, and a Ba2 rating (LGD1, 06) to the $250 million revolving credit facility.

The outlook is stable.

Ratings reflect the modest scale of the company's revenues and EBITDA in absolute terms, its dependence on a single niche business in a relatively narrow reference market compared with the wider chemicals industry, the business' historically high volatility and relatively high customer concentration risk, according to the agency.

Offsetting some of these risks are the company's good market position, increased profitability in 2010, its recently established spread hedging strategy to further mitigate the possible short term impact on profitability arising from the time lag in passing cost increases on to customers, its well-established relationships with blue-chip clients, and its product innovation capacity and market knowledge, the agency said.

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