S&P cuts Olin

S&P said it downgraded the ratings for Olin Corp. and its senior unsecured debt to BB from BB+. The 3 recovery rating remains unchanged, indicating expectations for a meaningful (50%-70%; rounded estimate: 50%) recovery in the event of a payment default.

“The downgrade follows Olin's significantly weaker performance in 2019 and our expectation that its EBITDA and credit metrics will deteriorate further in 2020. The company's adjusted EBITDA declined by about $320 million, or 25%, in 2019 on pricing and volume declines in its chlor alkali products and vinyls segment and reduced epoxy margins, which it marginally offset with lower raw material costs, productivity improvements and management's cost-reduction initiatives.

The agency expects that the company's performance will continue to weaken in 2020 because export prices for caustic soda were at 10-year lows as of the beginning of the year.

The outlook is negative.

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