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S&P rates Standard Industries loan BBB-
S&P said it gave a BBB- rating to Standard Industries Inc.’s planned $2.5 billion senior secured term loan due 2028 and downgraded Standard’s issuer rating to BB+ from BBB- and its senior unsecured notes to BB- from BBB-. The agency also removed all the ratings from CreditWatch, where it placed them with negative implications on April 27.
Standard Industries Inc. plans to distribute $3.2 billion in dividends to its parent, funded by $2.5 billion in secured term loan and the balance from cash on hand. The parent company will use distributions to finance the previously announced $7 billion acquisition of W.R. Grace & Co. S&P placed Standard on watch after the acquisition was announced.
“The material increase in debt burden will weaken credit measures despite strong business performance and continued robust market conditions. The $3.2 billion dividend distribution to the parent is a demonstration of Standard's aggressive financial policies,” S&P said in a press release.
The outlook is negative.
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