S&P: Ashland loan, notes BB

Standard & Poor's said it assigned a BB senior unsecured debt rating and 4 recovery rating to Ashland Inc.'s proposed $1.2 billion five-year senior unsecured credit facility and its proposed offering of senior unsecured notes with various maturities.

The 4 recovery rating indicates 30% to 50% expected default recovery.

The agency also said it affirmed the BB corporate credit rating on Ashland and its subsidiary, Hercules Inc., as well as the B+ rating and 6 recovery rating on Hercules' subordinated debt.

The 6 recovery rating indicates 0% to 10% expected default recovery.

S&P said it raised the ratings on Ashland's $500 million 4¾% senior notes due 2022 and $10 million of medium-term notes due 2013 to BB from BB- and revised the recovery ratings to 4 from 5.

A portion of the notes being issued are expected to be an add-on to the existing 4¾% senior notes due 2022.

The agency also said it lowered the ratings on the $76 million remaining balance of its 9 1/8% notes due 2017 to BB from BB+ and revised the recovery rating to 4 from 2. These notes, which were formerly secured, will become unsecured at closing of the proposed refinancing.

The proceeds, along with $200 million borrowed under the new credit facility and a small amount of balance sheet cash, will be used to fully repay about $2.4 billion of senior secured term loans, the agency said.

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