S&P rates W.R. Grace loan BBB-

S&P said it rated W.R. Grace & Co.’s new $300 million senior secured term loan BBB- with a 1 recovery rating. The 1 rating indicates an expectation for very high(90%-100%; rounded estimate: 90%) recovery in default.

W. R. Grace will use the proceeds and $270 million of preferred equity to finance the acquisition of Albemarle Corp.'s fine chemicals business for total cash consideration of $570 million.

S&P also changed W. R. Grace’s outlook to stable from negative and affirmed the BB issuer and BB- unsecured debt ratings.

“The outlook revision reflects our expectations for continued economic recovery in 2021, and the positive impact we believe this will have on W.R. Grace's operating performance and credit metrics. We also believe W.R. Grace will expand EBITDA levels and margins organically with the planned fine chemistry services business acquisition. While we view this transaction to be slightly leveraging, we believe that improvements in operating performance will cause Grace's credit metrics to be in line with our expectations for the rating,” the agency said in a press release.

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