S&P raises AZ Chem loan

Standard & Poor's said it raised its issue-level ratings on AZ Chem US Inc.'s $60 million first-lien senior secured revolving credit facility due 2016 and $550 million term loan due 2017 to BB- from B+ and revised the recovery ratings to 2 from 3, indicating an expectation of a substantial recovery in the event of a payment default.

At the same time, the agency said it affirmed the B+ corporate credit rating on the company and its parent, Arizona Chemical Holdings Corp. The outlook is stable.

S&P said the ratings on Arizona Chemical Holdings and AZ Chem US reflect the company's concentration in a niche market for specialty pine-based chemicals and its very aggressive financial policies, as well as S&P's view that industry conditions will support the current financial profile.

The agency said the rating also reflects the expectation that the company will not increase debt leverage beyond current levels to fund additional shareholder rewards or growth.

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