S&P rates Momentive Specialty loan, notes B-

Standard & Poor's said it affirmed its ratings, including the B- corporate credit rating, on Momentive Specialty Chemicals Inc. The outlook is stable.

The agency said it also assigned its B- issue-level rating and 3 recovery rating to Momentive's proposed $200 million revolving credit facility maturing in December 2014 and to Hexion U.S. Finance Corp.'s proposed $450 million first-priority senior secured notes due April 15, 2020.

According to S&P, the notes will be guaranteed on a senior secured basis by Momentive and the domestic subsidiaries that guarantee its senior secured credit facilities. The 3 recovery rating reflects an expectation of meaningful recovery in the event of a payment default.

The agency said the ratings on Momentive reflect the company's "highly leveraged" financial profile and "weak" business risk profile. The stable outlook reflects S&P's expectation of moderate global economic growth in 2012, with economic conditions and company results likely to be stronger in the second half of the year than in the first.

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