S&P lowers Koppers, rates notes B+

Standard & Poor’s said it lowered the corporate credit rating on Koppers Inc. to B+ from BB-.

The agency also said it assigned a B+ rating to the company’s proposed $400 million senior unsecured notes due in 2020. The recovery rating on the notes is 3, indicating 50% to 70% expected default recovery.

S&P also said it revised the recovery rating on the company’s existing $500 million senior secured revolving credit facility and $300 million term loan A to 1 from 2. The ratings remain at BB.

The 1 recovery rating indicates 90% to 100% expected default recovery.

The outlook is stable.

The proceeds will be used from the new senior unsecured notes to repay the existing $300 million in senior notes, partially repay the senior secured term loan A, pay breakage costs and fund transaction fees and expenses.

We expect to withdraw the ratings on the $300 million senior notes after they are repaid.

The relatively steady earnings generated by the Performance Chemicals and Railroad and Utility Products segments will impart a degree of stability on the company’s operating results, S&P said.

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