S&P downgrades Omnova

Standard & Poor's said it lowered the corporate credit rating on Omnova Solutions Inc. to B from B+ and its $150 million senior secured term loan to B from B+. The recovery rating is unchanged at 3.

The outlook is negative.

The downgrades reflect continued declining financial performance and expectation that the current difficult operating environment is likely to further delay a material improvement in the company's financial profile, according to the agency.

S&P said the rating reflects the company's vulnerable business position as a niche provider of emulsion polymers, specialty chemicals and decorative products to mature and highly competitive markets.

The rating also reflects exposure to volatile raw material costs, the agency added.

These attributes are partially offset by competitive business positions as the No. 1 or No. 2 supplier in each of its key end markets and moderate product diversification, the agency noted.

As of Aug. 31, the ratio of total adjusted debt to EBITDA was about 5.8x.

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