S&P rates Sterling, notes B-

Standard & Poor's said it assigned its B- corporate credit rating to Sterling Chemicals Inc.

The outlook is stable.

At the same time, the agency said it assigned a senior secured debt rating and a recovery rating to Sterling's proposed offering of $125 million of senior secured notes due 2015 under Rule 144A with registration rights.

The notes are rated B-, at the same level as the corporate credit rating, with a recovery rating of 3, the agency said, adding that the ratings are contingent on the issuance of the new notes, the proceeds of which will be used to refinance Sterling's $101 million notes due in December 2007 and for general corporate purposes.

The ratings reflect Sterling's position as a moderate-size commodity chemical producer and a highly leveraged capital structure while key business risks include Sterling's single manufacturing location, narrow product offering and significant customer concentration, according to S&P.

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