Moody's upgrades LSB Industries

Moody's Investors Service said it upgraded the corporate family rating of LSB Industries, Inc. to B2 from B3, the probability of default rating to B2-PD from B3-PD and the senior secured note rating to B2 from B3. The speculative grade liquidity rating was raised to SGL-1 from SGL-2.

"The upgrade reflects improved reliability and operating performance as well as completed and newly planned margin expansion projects, which should support earnings and free cash flow generation even when current strong nitrogen fertilizer prices return to more normalized levels," said Anastasija Johnson, a vice president and senior credit officer at Moody's, in a press release.

The company is issuing $175 million of add-on 6¼% senior secured notes due in 2028. LSB will use the proceeds to pursue strategic acquisition opportunities, to fund organic growth, including fixing bottlenecks to increase production capacity and other growth projects, and for general corporate purposes.

The SGL upgrade indicates LSB’s very good liquidity position over the next 12 months, the agency said.

The outlook is stable.

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