Moody’s rates new Hexion B3

Moody's Investors Service said it assigned a B3 corporate family rating, a B3-PD probability of default rating and a stable outlook to Hexion Inc. following the merger of Hexion Holdings Corp. and Hexion, Inc. with Hexion Inc. being the surviving entity. The B2 first-lien term loan and Caa2 second-lien term loan ratings will be moved to Hexion Inc. and will remain unchanged. The CFR, PDR, and the outlook of Hexion Holdings have been withdrawn.

“Moody's expects that Hexion's performance and credit metrics will weaken in 2023 due to the slowdown in North American new residential construction and repair and remodeling expenditures. However, Moody's expects a relatively modest decline compared to other chemical companies with exposure to the construction industry due to the contractual nature of its sales and ongoing cost reductions. Leverage is expected to be roughly 6.5x on a Moody's adjusted basis,” the agency said in a statement.

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