S&P assigns BB to Ineos loans

S&P said it revised the outlook on Ineos Group Holdings SA, Ineos Quattro Holdings Ltd. and Ineos Enterprises Holdings Ltd. to negative from stable assigned BB rating and 3 recovery ratings to the $2.8 billion of debt. A 3 rating indicates recovery prospects of 50%-70% (rounded estimate: 65%).

The agency concurrently affirmed the BB issuers and senior secured ratings.

The new loans will refinance a portion of the company's debt, and fund the acquisition of the Eastman Texas City site (total consideration of about $500 million).

Concerning the negative outlook, S&P said, “We now expect that weak industry conditions will remain until at least mid-year 2024. Despite somewhat different dynamics across the companies, most markets are experiencing weak demand and still healthy supply, leading to weaker margins. This is primarily due to slowing global economies amid high inflation and interest rates, and the effects such conditions have on end-customer demand.

“At the same time, certain industries have seen material capacity additions over the past year or so, contributing to market oversupply. Although we expect that economies should start recovering by year-end 2024, as inflation and interest rates ease, we believe that the timing remains highly uncertain,” S&P said in a press release.

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