S&P lifts Specialty Chemicals

S&P said it affirmed the B+ long-term issuer credit rating on Specialty Chemicals International BV.

The agency also said it raised the company's issue rating on its senior secured debt to BB- from B+ following the recent repayment of €50 million and revised up the recovery rating and expectations to 2 from 3.

The 2 recovery rating indicates 70% to 90% expected default recovery.

The company's EBITDA and profit margins keep rising and leverage is reducing in line with expectations with adjusted debt-to-EBITDA approaching 3x in 2018, down from 3.5x at year-end 2017, S&P said.

The outlook is stable because over the next 12 months, S&P said it expects Specialty Chemicals will continue to deliver stronger EBITDA, solid free operating cash flow and synergies from the merger that formed the group in 2017.

The agency said it expects the company's credit metrics will further improve through 2020, thanks to continuous good operating performance.

S&P said it reported increased EBITDA, a higher EBITDA margin and solid cash flow generation in 2018, which is expected to continue due to positive fundamentals in its key markets.

Synergies from the merger and favorable market trends will support a continuous increase in EBITDA, the agency said.

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