S&P cuts Omnova

Standard & Poor's said it lowered its ratings on Omnova Solutions Inc., citing continued profitability weakness as a result of elevated raw material costs and the company's subpar financial profile relative to ratings expectations.

S&P lowered the company's corporate credit rating to B+ from BB-, the senior secured bank loan rating to BB- from BB, and the senior secured debt rating to B+ from BB-.

S&P said the ratings reflect the company's fair market positions and decent product diversification, offset by competitive markets, exposure to volatile raw material costs and economic cycles, and a very aggressive financial profile.

The ratio of total debt (adjusted to capitalize operating leases) to EBITDA remains aggressive at about 5x, a level consistent with expectations at the current ratings. Other credit protection measures remain weak, with funds from operations to adjusted debt at about 7%.

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