S&P downgrades Hexion

S&P said it lowered the issuer credit rating on Hexion Inc. to B- from B. The outlook is negative.

At the same time, S&P cut the issue-level rating on the company's term loan facility to B+ from BB- with a 1 recovery rating, indicating an expectation for very high recovery (90%-100%; rounded estimate: 95%) in a payment default.

S&P also lowered the issue-level rating on the company's unsecured notes to CCC+ from B- with a 5 recovery rating, indicating an expectation for modest recovery (10%-30%; rounded estimate: 10%).

“The downgrade reflects our expectation that economic recessions in many parts of the world, including in the U.S., will depress Hexion's EBITDA and cause credit metrics to deteriorate in 2020. This follows Hexion's weaker-than-expected performance in 2019,” S&P said in a news release.

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