S&P: Kosa remains on watch developing

Standard & Poor's said its ratings on polyester producer KoSa BV, including the company's BB+ senior secured bank loan rating, remain on CreditWatch with developing implications, following the announcement that KoSa's parent, Koch Industries Inc., has purchased Invista from E.I. DuPont de Nemours & Co.

The CreditWatch update follows the announcement that Koch Industries has purchased Invista, formerly DuPont Textiles and Interiors, from E.I. DuPont de Nemours & Co. for about $4.4 billion in cash. Invista, with about $6.5 billion in sales, consists of DuPont's nylon fiber, polyester fiber and Lycra brand fiber businesses.

Koch has indicated that it will integrate its KoSa BV polyester business with Invista, although the structure of any such combination or related financing plan has not been announced.

Accordingly, the ratings on KoSa could be lowered, affirmed, or raised depending on the financial structure of the proposed transaction, and the outcome of a full assessment of the business profile of the combined entity.

S&P said it would expect that KoSa's existing debt, which consists solely of bank borrowings under committed credit facilities, would be refinanced as part of a financing plan related to the proposed transaction.

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