S&P upgrades OM Group

Standard & Poor's said it removed all of its ratings on OM Group Inc. from CreditWatch and raised the corporate credit rating to BB from BB-.

The agency also said it raised the senior secured rating on the company's $200 million revolving credit facility and its term loan A to BBB- from BB-.

The recovery rating on the revolving credit facility and term loan A was revised to 1, indicating 90% to 100% expected default recovery.

The outlook is stable.

The upgrade reflects an improvement in its credit quality following a substantial paydown of debt, S&P said, and the divestment of the company's cobalt-based business.

The divestment is viewed as reducing overall exposure to cyclicality and to uncertainties in the operating environment of the Democratic Republic of Congo, the agency said.

OM Group's announcement that acquisitions will form a part of its growth strategy tempers the current expectations for an improvement beyond the one-notch upgrade because the company could potentially raise debt to fund some of its growth plans, S&P added.

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