S&P cuts Wellman loan to B+

Standard & Poor's said it lowered its rating on Wellman Inc.'s proposed $185 million secured first-lien term loan due 2009 to B+ from BB- following the company's indication that its pending financing plan was being revised to increase the size of the secured first-lien term loan to $185 million from $125 million as originally proposed.

At the same time, S&P revised its recovery rating on the proposed term loan to 3 from 1 to address the lenders' somewhat weaker prospects for full recovery after considering the increased amount of secured first-lien claims. S&P affirmed its other ratings on Wellman, including the company's B+ corporate credit rating.

The outlook is negative.

S&P said the ratings on Wellman reflect a below-average business risk profile that recognizes its sizable positions in the polyester staple fiber and PET segments of the polyester market, offset by inherent industry cyclicality, considerable import pressure from foreign fiber producers, and diminished operating profitability measures.

The ratings are supported by satisfactory availability under committed bank facilities and a manageable debt maturity profile following the expected completion of the proposed refinancing transaction.

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