S&P rates AZ Chem B, loans B, CCC+

Standard & Poor's said it assigned its B corporate credit ratings to AZ Chem Sweden Holdings AB and its wholly owned U.S. subsidiary AZ Chem US Inc.

The outlook is stable.

At the same time, S&P said it assigned its B bank loan ratings and its recovery ratings of 2 to AZ Chem US Inc.'s proposed $190 million first-lien secured credit facilities, consisting of a $50 million revolving credit facility and a $140 million term loan and to AZ Chem Sweden's proposed $100 million first-lien term loan.

The agency said it also assigned a CCC+ rating and a 5 recovery rating to AZ Chem US Inc.'s proposed $136 million second-lien term loan.

According to S&P, the ratings reflect a vulnerable business position in a niche for specialty pine-based chemicals, with moderate operating profit margins, some concentration of revenue among key customers and a highly leveraged financial profile and these risk factors are partly offset by the company's favorable market shares and global presence in its business, the stability of operating profit margins reflecting satisfactory pricing power and relatively stable non-hydrocarbon-based raw material costs and a focus on growing the contribution from value-added products.

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