S&P rates Styrolution loan B

Standard & Poor’s said it maintained on CreditWatch with negative implications the ratings on Styrolution Group GmbH, including the B+ long-term corporate credit rating and B+ rating on its senior secured notes.

S&P also said it assigned a B rating and 4 recovery rating to the proposed €1.6 billion equivalent seven-year senior secured term loan.

The proceeds, which are to be put into an escrow account until the regulatory approval is received, will be used to fund a planned acquisition.

The CreditWatch placement reflects that the agency expects to lower the corporate credit rating to B once the transaction receives regulatory approval and the company attracts the funding.

This is because of a substantially higher leverage that expected post-transaction with 4.6x adjusted debt-to-EBITDA at year-end 2014, up from our previous forecast of 2.0x, the agency said.

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