Moody's changes S&B outlook to positive

Moody's Investors Service said it affirmed the B3 corporate family rating and the B2-PD probability of default rating of S&B Minerals Finance SCA, affirmed the B3 rating of the €275 million senior secured notes due 2020 issued by the company and S&B Industrial Minerals North America, Inc. and changed the outlook to positive from stable.

The positive outlook reflects Moody's view that S&B is more strongly positioned within its B3 corporate family rating as management delivers on its business plan and is takes steps toward improving the company's credit metrics and reducing leverage toward 4 times or lower, mainly by focusing on profitable growth via both organic and bolt-on merger and acquisition initiatives.

The affirmation reflects Moody's view that S&B's credit profile is supported by its leading position globally for the production of continuous casting fluxes, perlite and wollastonite and its No. 2 position for bentonite with a limited number of competitors and a good degree of customer diversification.

The agency said the rating remains constrained by the company's small scale, a rather high degree of asset concentration in Greece and the high volatility of the company's historical performance due to the cyclicality of its main end markets.

However, the company's exposure to Greece is a lesser concern now that Moody's has upgraded the sovereign rating on the country's government bonds to Caa1 from Caa3 and the local- and foreign-currency country ceilings for long-term debt to Ba3 from B3.

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