Moody's rates Momentive loan B1

Moody's Investors Service said it affirmed Momentive Performance Materials Inc.'s B2 corporate family rating, B2-PD probability of default rating, along with the ratings on the existing notes.

Moody's also said it assigned a B1 (LGD 3) rating to Momentive's proposed $839 million first-lien senior secured term loan.

The outlook is stable.

The proceeds of the proposed term loan, along with other debt and equity capital, will be used to finance Momentive's acquisition by KCC Corp., SJL Partners LLC and Wonik QnC Corp., the agency said, and to repay the existing notes.

The ratings reflect the company's improved earnings amid tight silicone supply, initially high debt leverage following the acquisitions and the potential of business synergies and cash generation under the new ownership, Moody's said.

The agency said it expects the tight global silicone supply will likely keep Momentive's earnings elevated the next one- or two-years despite a slowing economy.

The ratings are constrained by an initially high debt leverage after the acquisition, Moody's said.

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