S&P ups KMG Chemicals

S&P said it raised its corporate credit rating on KMG Chemicals Inc. to B+ from B. The outlook is positive.

At the same time, S&P raised its issue-level ratings on the company's first-lien senior secured credit facility to BB (two notches above the corporate credit rating) from B+ and revised the recovery rating to 1 from 2, indicating a very high (90%-100%; rounded estimate: 95%) recovery in the event of payment default.

“The upgrade reflects our expectation that KMG will operate with lower leverage going forward, given that it is using proceeds from the recent equity offering to prepay approximately $176 million of the company's term loan B,” S&P said in a news release. “Additionally, given the lower debt levels, the company debt service costs have improved, which will lead to higher free cash flow generation.”

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.