S&P drops Ashland, on watch

Standard & Poor's said it lowered its corporate credit and senior unsecured debt ratings on Ashland Inc. to BBB- from BBB and placed the ratings on CreditWatch with negative implications.

The short-term corporate credit and commercial paper ratings were lowered to A-3 from A-2, but were not placed on CreditWatch in light of the company's strong cash position, the agency said.

S&P noted the rating actions are in response to the firm's announcement that operating income for the fourth quarter ending Sept. 30, for one of its key businesses, Ashland Paving and Construction Inc., is expected to be down sharply year over year.

Moreover, the agency said it remains concerned about Ashland's ability to successfully execute its strategy of acquiring chemical companies in the $100 million to $500 million range near term and thus bolster poor consolidated operating margins and earnings.

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