S&P cuts W.R. Grace view to negative

S&P said it affirmed its BB+ corporate credit rating on W.R. Grace & Co. and revised the outlook to negative from stable.

At the same time, S&P affirmed its BBB- issue-level rating and 1 recovery rating on the company's senior secured term loan. The 1 recovery rating reflects an expectation of very high (90% to 100%; rounded estimate: 95%) recovery in the event of a payment default.

S&P also affirmed its BB+ issue-level rating and 4 recovery rating on the company's senior unsecured notes. The 4 recovery rating reflects an expectation of average (30% to 50%; rounded estimate: 30%) recovery in the event of payment default.

“The revision of W.R. Grace's outlook to negative from stable reflects our view that credit measures have little cushion at the current ratings and that any additional debt from the pending acquisition of Albemarle Corp.'s polyolefin catalyst assets could increase leverage beyond what we consider to be appropriate for the current rating,” S&P said in a news release.

“Partially offsetting additional debt is our expectation that the company will add incremental EBITDA from this acquisition.”

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