S&P raises Ineos Styrolution, loan

S&P said it raised its long-term corporate credit rating on Ineos Styrolution Holding Ltd. (Styrolution), a holding company of Ineos Styrolution Group GmbH, to BB- from B+.

The outlook is stable.

At the same time, the agency upgraded its issue rating on the €1 billion first-lien senior secured loan due 2021 issued by Ineos Styrolution Group GmbH and guaranteed by Styrolution to BB from BB-. The recovery rating is 2, indicating an expectation of substantial (80%) recovery prospects for creditors in the event of payment default.

S&P said the upgrade reflects Styrolution's continued strong EBITDA generation amid top-of-the-cycle conditions in the styrenics industry, with EBITDA (after exceptional items) of €796 million reported for 2016.

“We anticipate that Styrolution will deliver EBITDA of about €690 million-€710 million in 2017, helped by strong demand from the automotive, packaging, and consumer durable end-markets,” the agency said in a news release.

“This is notwithstanding recent increases in the price of benzene, which we believe will be offset by the corresponding increase in prices of styrene as tight supply continues, supporting sustained styrene-benzene margins of at least $260-270 per metric ton on average during the year.”

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