S&P changes Orion Engineered to positive

S&P said it revised its outlook on Orion Engineered Carbons SA to positive from stable and affirmed the BB- long-term corporate credit rating.

At the same time, the agency affirmed its BB- issue ratings on the €665 million senior secured term loan due 2021 and the €115 million revolving credit facility due 2019. The 3 recovery rating on these instruments indicates an expectation of recovery in the higher half of the 50%-70% range.

S&P said the outlook revision reflects the good performance of Orion's two business segments as well as the company's ongoing debt reduction from consistently positive free cash flows.

The agency now views the company's operating performance as slightly stronger, supported by the company's resilience to oil price volatility.

S&P also takes into account Orion's credit metrics being increasingly better for the rating as reported net debt to EBITDA approaches the company's long-term target of 2 times or below, which stood at about 2.5 times at end-October, down from 2.9 times at year-end 2015.

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