Fitch puts W. R. Grace on watch

Fitch Ratings said it placed the BB+ long-term issuer default ratings of W.R. Grace & Co. and W.R. Grace & Co. - Conn on rating watch negative following the company's announcement it plans to acquire Albemarle Corp.’s fine chemistry services business for about $570 million. Grace plans to use $300 million in cash and issue $270 million in preferred equity to Albemarle.

“The negative rating watch reflects the potential for heightened financial risk associated with the transaction. The $300 million cash portion of the transaction will require some level of debt funding. The amount of permanent debt used to fund the cash portion of the transaction, alongside the level of equity credit assigned to the preferred shares once terms are finalized, will determine the speed with which Grace can de-lever,” Fitch said in a press release.

Fitch said it plans to resolve the rating watch upon the transactions close.

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