Moody’s lowers LSB Industries, notes to B1

Moody's Investors Service said it downgraded LSB Industries, Inc.’s corporate family rating to B1 from Ba3, probability of default rating to B1-PD from Ba3-PD and senior secured notes to B1 from Ba3.

The one-notch downgrade results from unusually weak second quarter earnings, the increased capital required to complete the ammonia plant at El Dorado and the expectation that credit metrics will remain very weak through 2016.

The outlook is negative. The speculative grade liquidity rating was lowered to SGL-4 from SGL-2.

"Continued operational issues along with the increase in capital required to complete on-going projects at El Dorado will substantially weaken net debt credit metrics by the end of the third quarter," Lori Harris, Moody’s associate vice president and lead analyst for LSB, said in a news release.

"Moody's expects the company to raise additional capital by fourth quarter to support its funding needs through 2016."

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