Moody's assigns ISP Chemco loan Ba3

Moody's Investors Service said it assigned Ba3 ratings to the new proposed $1.15 billion guaranteed senior secured credit facilities of ISP Chemco, Inc., a wholly owned subsidiary of International Specialty Holdings, Inc. (Ba3 corporate family rating).

The proposed facilities include a new $200 million revolver due 2012 and a new $950 million term loan due 2013.

Moody's said the lower Ba3 rating of the proposed ISP Chemco credit facilities versus the Ba2 on the existing credit facilities reflects the removal of all debt that was subordinated to the secured credit facilities and that under a distressed valuation of the collateral would not be sufficient to cover the secured debt.

The outlook is stable.

The agency also said it affirmed the company's guaranteed senior secured credit facilities at Ba2 and senior subordinated notes at B1.

The proposed ratings reflect ISP Chemco's relatively strong business position, offset by a high and increased secured debt burden, the agency noted.

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