S&P rates Ashland notes BB-

Standard & Poor's said it affirmed the BB- corporate credit rating on Ashland Inc. and assigned an unsecured debt rating of BB- and a recovery rating of 4 to its proposed offering of $600 million of senior unsecured notes due 2017 to be issued under Rule 144A.

The outlook is stable.

Proceeds will be used to help repay the $750 million bridge loan used to finance the November 2008 acquisition of Hercules Inc.

The agency said it views the notes issuance as a net positive for credit quality because it extends debt maturities although it reduces liquidity somewhat.

The rating reflects "the company's weak, but improving, business risk profile and highly leveraged financial risk profile," S&P analyst Cynthia Werneth said in a statement.

"From a business risk perspective, the $3.5 billion Hercules acquisition was a strong positive because it added substantial specialty chemical assets with favorable business risk characteristics."

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