S&P: AZ Chem loans BB-, B-

Standard & Poor's said it assigned a BB- rating and 2 recovery rating to AZ Chem US Inc.'s proposed first-lien senior secured credit facilities, including a $60 million revolving credit facility and $675 million term loan.

The 2 recovery rating indicates 70% to 90% expected default recovery.

The agency also said it assigned a B- rating and 6 recovery rating to the company's proposed $205 million second-lien term loan facility, indicating 0 to 10% expected default recovery.

S&P also said it affirmed the B+ corporate credit rating on ultimate parent company, Arizona Chemical Holdings Corp.

The outlook is stable.

The ratings reflect the company's concentration in the niche-based pine chemicals market, where it compares favorably to competing products, S&P said, and its exposure to cyclical end markets.

The ratings also consider the company's track record of debt-funded dividend distributions following regular debt prepayments from cash flow, which should allow the company to maintain debt-to-EBITDA at less than 5x, the agency said.

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