S&P affirms Lucite

Standard & Poor's said it affirmed Lucite International Group Holdings Ltd.'s BB long-term corporate credit rating and Lucite International Finance plc's B+ senior subordinated debt rating and removed them from CreditWatch developing, where they were placed on Jan. 31. The outlook is negative, due to the likelihood that Lucite's private equity owner, Charterhouse, will not continue the sale process of the company.

The removal from CreditWatch development and the assignment of a negative outlook reflects S&P's expectation that Charterhouse's strategic alternatives for its investment in Lucite could result in an increased leverage, which could negatively influence the company's credit profile.

The ratings continue to reflect Lucite's satisfactory business risk profile, the agency said. With about a 38% share of the merchant market (products sold externally, in contrast with products used internally) and a 25% share of world production, Lucite is by far the global leader for methacrylate monomers.

S&P said the company's ratings are constrained by its concentration in the cyclical acrylics market, by its exposure to certain cyclical downstream end markets including construction and by the company's leveraged capital structure and limited free operating cash flow base of about €22 million in 2005.

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