S&P lowers Solvay

S&P said it lowered Solvay SA’s long-term issuer rating to BBB- from BBB. Solvay’s notes are either no longer rated by the agency or have been transferred to Syensqo SA.

“Following the partial demerger, Solvay retains leading market positions in its key commodity chemicals. The company is now focused on being a global producer of soda ash and bicarbonate, peroxides, and silica, with the product portfolio also including rare earth minerals for auto catalysts and solvents (phenols and acetone). While we view the business as largely focused on commodity chemicals (85%), we consider that it has a dominant role in its key markets,” S&P said in a press release.

The agency added, “The debt structure at closing is aligned with the company's guidance. Our debt figure includes about €1.8 billion in long-term debt, while we factor in adjustments for lease obligations (€332 million), environmental provision (€98 million), pension obligations (€487 million), and litigation provisions (€52 million), and consider €40 million of cash as not immediately available for debt repayment.”

S&P said it estimates Solvay's S&P Global Ratings-adjusted FFO to debt at about 30% in 2024-2025, putting it at the higher end of the 20%-30% range it considers commensurate with a significant financial risk profile.

The outlook is stable.

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