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S&P affirms Cabot
Standard & Poor's said it affirmed its ratings on Cabot Corp., including its BBB+ corporate credit rating. The outlook is negative.
The agency said it removed the ratings from CreditWatch with negative implications.
At the same time, the agency said it assigned its BBB+ issue ratings to the company's proposed $600 million in unsecured notes, consisting of two series of notes of $300 million each.
According to S&P, the company plans to use the notes, along with $250 million in drawings under a revolving credit facility and $250 million of cash, to fund the acquisition, which is expected to close in fiscal year 2012.
S&P said the acquisition strengthens aspects of the company's business risk profile, albeit only modestly, so that the overall business risk profile remains satisfactory. The agency also said it believes that the largely debt-funded acquisition weakens the company's financial risk profile somewhat, but it assumes that credit metrics will strengthen to levels appropriate for the ratings in the next 12 to 24 months.
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