S&P upgrades Ineos

S&P said it raised its long-term corporate credit ratings on Ineos Group Holdings SA (Ineos) and Ineos Holdings Ltd. to BB from BB-. The outlook is stable.

At the same time, S&P raised its issue ratings on Ineos' loan B tranches due in 2022 (€3 billion) and 2024 (€1.4 billion) to BB+ from BB. The recovery rating remains 2, indicating an expectation of the 85% recover in the event of a default.

Ineos has announced it will reduce these tranches by €250 million and refinance the remaining term loans due 2022 and 2024 with new tranches of euro- and dollar-denominated term loans due 2024 in about the same amount, but with narrower interest-rate margins than the existing tranches.

S&P said it raised the issue rating on the €770 million senior secured notes due 2023 to BB+ from BB. The recovery rating remains 2, indicating an expectation of 85% recovery in the event of a default.

S&P also raised its issue rating on the group's 2024 senior unsecured notes (€650 million and US$500 million) to B+ from B. The recovery rating on this debt remains 6, indicating an expectation of negligible recovery (0%) in a default scenario.

“The upgrades reflect Ineos' robust operating performance and strong cash flow generation in 2017; the €250 million reduction in gross debt as part of the proposed transaction; and management's commitment to achieving a higher rating,” S&P said in a news release.

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