S&P drops Reichhold, notes

Standard & Poor's said it lowered its corporate credit rating on Reichhold Industries Inc. to CCC- from CCC.

The outlook is negative.

At the same time, the agency lowered its issue rating on the company's senior secured notes to CC from CCC-. The recovery rating is unchanged at 5.

S&P said the downgrade reflects the increasing likelihood that continued weak operating performance and negative cash flow will lead to a payment default or debt restructuring before the end of 2014.

The agency believes that the company's severely constrained liquidity makes it unlikely that it will be able to make its November 2014 interest payment without a favorable change in circumstances.

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