S&P gives LSB notes B+

Standard & Poor's said it assigned its B+ preliminary corporate credit rating to LSB Industries Inc.

The outlook is stable.

At the same time, S&P assigned its B+ preliminary issue-level rating to the company's $400 million senior unsecured notes due 2021, with a preliminary recovery rating of 3, indicating the expectation for meaningful (50% to 70%) recovery in the event of a payment default.

LSB plans to use the proceeds from the note offering to refinance all outstanding borrowings and for general corporate purposes, including capital spending.

"The ratings on LSB reflect the company's rather narrow focus on commodity nitrogen-based products, multiple operational problems over the past year, and our expectation of significantly negative free operating cash flow over the next two years," S&P credit analyst Seamus Ryan said in a news release.

"Nevertheless, the company benefits from some end market diversity, the stability of the climate control business, and our expectation of continued favorable industry conditions. We characterize LSB's business risk profile as 'weak' and its financial risk profile as 'aggressive.'"

© 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.