S&P rates Olin loan, notes BB+

Standard & Poor’s said it assigned a BB+ rating and 4 recovery rating to Olin Corp.’s announced senior unsecured term loan and senior unsecured notes.

The 4 recovery rating indicates 30% to 50% expected default recovery.

Subsidiary Blue Cube Spinco Inc. is issuing the senior unsecured notes on behalf of Olin Corp.

The BB+ corporate credit rating and stable outlook on Olin are unchanged, S&P said.

The issue will partially fund the company’s recently announced merger with the Dow Chemical Co.'s chlor-alkali- and downstream-derivatives business in a Reverse Morris Trust transaction, the agency said.

The ratings reflect an expectation that the transaction with Dow is likely to close as currently proposed, S&P said.

The addition of Dow’s chlorine assets should improve Olin’s scale and diversity, especially with respect to building the company’s downstream chlorine business, S&P said.

Following the combination, Olin will deliver a significantly greater proportion of its chlorine into more stable and profitable downstream products rather than the volatile merchant market, the agency said.

But the additional leverage required to fund this transaction will offset the improvements to the business over the next one to two years, S&P added.

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