S&P affirms Momentive, rates term loan B

Standard & Poor's said it affirmed its ratings, including the B- corporate credit rating, on Momentive Performance Materials Inc. At the same time, the agency said it revised the outlook to negative from stable.

The agency said it also assigned a B issue-level rating and 2 recovery rating to Momentive subsidiary Momentive Performance Materials GmbH's proposed $175 million senior secured first-lien term loan maturing in May 2015. The 2 recovery rating reflects an expectation for substantial recovery in the event of a payment default

"The outlook revision reflects our expectation that MPM will continue to face challenging market conditions during the next several quarters primarily due to tepid global economic growth and silicone oversupply following industry capacity additions over the past year," said S&P credit analyst Cynthia Werneth in a news release.

"We believe this will result in weak EBITDA generation and negative free operating cash flow. However, based on our expectation for stronger global economic growth in the second half of the year, we expect MPM's operating results to gradually improve," Werneth said.

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