Moody’s cuts, rates Ineos loan Ba3

Moody's Investors Service said it downgraded the corporate family rating of Ineos Group Holdings SA to Ba3 from Ba2 and its probability of default rating to Ba3-PD from Ba2-PD. The agency also lowered the instrument ratings on the backed senior secured facilities and backed senior secured bonds issued by Ineos Finance plc to Ba3 from Ba2, as well as the instrument ratings on the backed senior secured term facilities issued by Ineos US Finance LLC to Ba3 from Ba2.

Additionally, Moody's assigned Ba3 rating to the planned backed senior secured term loan being marketed by Ineos US Finance and Ineos Finance, wholly owned subsidiaries of Ineos Group Holdings.

“Today's rating action reflects the continuing weak performance of the company amid a cyclical downturn in the chemical industry with 2023 EBITDA of €1.7 billion reflecting about 41% decline year over year. The downgrade also reflects the uncertainty regarding the timing of the cyclical turnaround and the fact that Ineos' performance has been sustained for close to a year outside the rating guidance: debt/EBITDA expected around 6.3x for 2023 (versus rating guidance of under 4x), net debt/EBITDA at approximately 5.3x (versus rating guidance of 3.5x), and RCF/debt of about 6% (versus guidance of 20%).

“Furthermore, Ineos has announced a $700 million acquisition of the oxide business from LyondellBasell Industries NV (Baa2 stable) which is expected to be debt-financed,” Moody’s said in a press release.

On the plus side, Ineos reported its EBITDA for the fourth quarter of 2023 was up 15% year-over-year to €451 million.

The outlook remains negative.

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