S&P drops Chemtura to CCC

Standard & Poor's said it lowered the corporate credit and senior unsecured debt ratings on Chemtura Corp. to CCC from B and removed ratings from CreditWatch with negative implications where they were placed Dec. 17.

The recovery rating on the company's senior unsecured notes is unchanged at 4.

The outlook is negative.

"The downgrade reflects the company's stressed liquidity position following recent negotiations with its lenders and heightened concerns regarding Chemtura's upcoming debt maturity on its $370 million 7% notes on July 15, 2009, in light of the increasingly challenging operating and credit market environment," S&P analyst Liley Mehta said in a statement.

Ratings incorporate vulnerability of operating results to competitive pricing pressures, raw-material costs and cyclical markets, the agency said.

They also reflect weak cash flow protection measures because of poor profitability and slow demand in certain businesses, the agency added.

These factors are tempered by a diversified portfolio of specialty and industrial chemical businesses that generate annual revenue of roughly $3.6 billion, Moody's said.

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