Moody's downgrades Venator

Moody's Investors Service said it downgraded Venator Materials plc’s corporate family rating of to Caa1 from B2, the probability of default rating to Caa1-PD from B2-PD and the company's speculative grade liquidity rating to SGL-4 from SGL-2.

The agency also lowered the ratings of Venator Materials LLC's senior secured term loan B and senior secured notes downgraded to Caa1 from B1, and the ratings on the senior unsecured notes to Caa3 from Caa1. The outlook has been changed to negative from stable.

“The rating downgrades reflect the rapid deterioration in Venator's credit metrics and financial flexibility given the negative EBITDA for the last two quarters, continued weak demand for TiO2, high energy costs and operational challenges in Europe. Although destocking is likely to end in early 2023, business fundamentals will remain soft throughout the year. While management is implementing business restructuring, asset disposals and sales and leaseback transactions, refinancing risk is high due to poor credit metrics and liquidity remains challenged with expected negative free cash flow in 2023 and debt maturities in 2024,” Moody’s said in a press release.

The SGL-4 rating reflects the forecasted negative free cash flow and maturing debt in the next 12-18 months, the agency said.

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