S&P affirms Cognis

Standard & Poor's said it affirmed its B long-term corporate credit ratings on Cognis GmbH and related entity Cognis Deutschland GmbH & Co. KG, in response to the company's refinancing plans.

Other affirmed ratings include Cognis' senior secured €345 million 9 ½% notes due 2014 at CCC+, Cognis Deutschland's senior secured first-lien bank loan at B with recovery rating of 3, senior secured second-lien bank loan at CCC+, Cognis Holding GmbH's corporate credit rating at B and its floating-rate payment-in-kind (PIK) notes due 2015 at CCC+.

The outlook is stable.

Cognis plans to refinance its €898 million senior loans, €392 million second-lien loans and notes and up to €350 million of its PIK notes issued by Cognis Holding with €1,650 million senior secured floating-rate notes and loans issued by Cognis, S&P said.

The ratings reflect the group's high leverage, following an leverage buyout in late 2001 and subsequent dividend payouts to shareholders that were debt-financed, such as the issuance of PIK notes by Cognis Holding in January 2005, the agency said.

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