S&P rates Omnova loan B+, view positive

S&P said it affirmed its B corporate credit rating and revised its outlook on Omnova Solutions Inc. to positive from stable.

At the same time, S&P assigned a B+ issue-level and 2 recovery ratings to Omnova’s proposed senior secured term loan. The 2 recovery rating indicates an expectation of substantial (low end of the 70% to 90% range) recovery in the event of a payment default.

“The outlook revision reflects our expectation that Omnova will continue to benefit from an improved product mix, ongoing cost-reduction initiatives, and new product introductions, resulting in gradually improving EBITDA margins in the next 12-24 months,” said S&P credit analyst Brian Garcia in a news release.

“As a result, we expect credit measures to gradually improve over the next 12-24 months.”

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