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S&P rates Specialty Chemicals loan B
S&P said it assigned a B long-term corporate credit rating to Specialty Chemicals International BV (Dutch HoldCo), the intermediate holding company of the combined intermediates, coating and composites producers Polynt Group and Reichhold.
The outlook is stable.
S&P also said it assigned a B rating to the €413 million term loan borrowed by Specialty Chemicals Holding II BV, Specialty Chemicals International Inc., Reichhold Holdings International BV, Polynt Composites USA Inc. and Reichhold LLC 2.
The recovery rating on the term loan is 3, indicating 50% to 70% expected default recovery.
The ratings follow news that Dutch HoldCo has refinanced the combined group capital structure, S&P said.
The group has recently received the required regulatory approvals to combine Polynt with Reichhold, the agency explained.
The approval is subject to the divestiture of certain assets to Ashland Global Holdings Inc., following completion of the combination, S&P said.
Several operating and non-operating entities within the new combined group have issued debt to fund the refinancing, in the form of a €413 million senior secured term loan and €197 million of senior secured notes, the agency said.
In addition, the transaction includes a super senior secured €60 million revolving credit facility, which was not expected to be drawn at closing, and common equity provided by the sponsors.
After combining Polynt Group and Reichhold, Dutch HoldCo will become a vertically integrated specialty chemical producer, S&P explained.
The group will serve a wide variety of product applications and end-markets globally, the agency said.
The ratings are constrained by Dutch HoldCo's relatively small size with EBITDA of less than €200 million, S&P said, and its exposure to cyclical end markets.
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