Moody’s rates Ineos facility Ba2

Moody’s Investors Service said it assigned Ba2 ratings to Ineos Quattro Holdings Ltd.’s senior secured term loan B currently being marketed as well as the revolving credit facility and term loan A facilities.

The agency downgraded the corporate family rating of Ineos Quattro, formerly known as Ineos Styrolution Holding Ltd., to Ba3 from Ba2. Moody’s cut Ineos Quattro’s probability of default rating to Ba3-PD from Ba2-PD.

Moody’s further confirmed at Ba2 ratings assigned to Ineos Styrolution Group GmbH’s and Ineos Styrolution US Holding LLC’s senior secured term loan facilities due January 2027, as well as the Ba2 rating assigned to the €600 million of senior secured notes due January 2027 issued by Ineos Styrolution Group.

The outlook assigned negative for Ineos US Petrochem LLC is negative and changed to negative from rating under review for Ineos Quattro, Ineos 226 Ltd., Ineos Styrolution Group and Ineos Styrolution US Holding. The outlook reflects the high leverage for this rating category and an uncertain global economic climate. This rating action concludes the review for downgrade started on July 1 following the company’s planned acquisition of the petrochemical assets of BP plc, the agency said.

The Ba3 CFR reflects Ineos Quattro’s size and scope with top market positions globally in various chemical products, its diverse product lines and end markets, a track record of successful acquisition integration by the group coupled with a history of consistently beating initial synergy expectations, Moody’s said.

“Counterbalancing these strengths, the rating also incorporates significant uncertainty related to the integration of the legacy and acquired businesses that have limited vertical integration, material underperformance in the aromatics business in the wake of coronavirus, expectations of $150 million in synergies (primarily fixed costs) which are yet to be realized, as well as a history of significant risk appetite across the broader Ineos group and the limited available disclosure regarding the larger Ineos group outside of the rated entities,” the agency said in a press release.

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