Moody's rates Hexion notes B3

Moody's Investors Service said it assigned a B3 rating (LGD4, 57%) on Hexion Specialty Chemicals, Inc.'s proposed $700 million senior secured 1.5 lien notes due 2018.

The agency also affirmed Hexion's corporate family rating of B3. The speculative liquidity rating remains SGL-3.

The outlook is negative.

Moody's said it views the debt issuance and amendments as positive since they extend the debt maturity profile, reduce the refinancing risk on the term loan and provide more financial flexibility but the improvements are insufficient to warrant an upgrade as the company remains highly levered and operating environment remains uncertain.

Pro forma for the deal, the company's net debt-to-EBITDA ratio is 8.8x.

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