S&P turns Solvay view to negative

S&P said it revised its outlook for Solvay SA to negative from stable but affirmed its BBB issuer rating.

Solvay is considering splitting the company into two publicly traded companies. If approved the separation would take place in the second half of 2023.

“We see the business split as negative for Solvay's credit quality, since each company would be less diversified than under the current consolidated perimeter. After the demerger, Solvay's size and scope would be significantly smaller, when compared with larger, more diversified companies. Solvay would be exposed to mature, albeit stable, end markets with moderate-to-low growth prospects,” S&P said in a press release.

The new outlook reflects the view that after the demerger, the agency could lower the ratings if Solvay has a weaker business risk profile that is not offset by stronger credit metrics, S&P said.

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