Moody's ups Momentive, rates loan Ba3

Moody's Investors Service said it upgraded Momentive Performance Materials Inc.'s corporate family rating to B1 from B2, probability of default rating to B1-PD from B2-PD and assigned a Ba3 rating to the company's proposed $850 million first-lien senior secured term loan due 2028. The outlook is changed to stable from positive.

"The rating upgrade reflects Momentive's improving financial flexibility thanks to its business restructuring, increasing share of specialty silicones, close oversight and strong support by KCC, as well as the anticipated extension of its term loan maturities to 2028. We expect Momentive to accrue business synergies under KCC's ownership and continue to benefit from KCC's guarantee to its second lien term loan. Momentive's improved business fundamentals and its close tie with KCC will help buffer this year's challenging market conditions and support earnings growth in 2024," said Jiming Zou, Moody's lead analyst for Momentive, in a press release.

The Ba3 rating on the proposed loan reflects its first-lien on substantially non-asset-based lending assets and second lien on all ABL assets and its seniority versus second-lien term loan, the agency said.

The proceeds will be used to repay its $804 million first-lien term loan, cover related issuance fees and expenses and replenish cash reserve. Concurrently, the company is extending the maturity of its $839 million second-lien term loan, which is guaranteed by KCC and unrated by Moody's, to 2028.

© 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.