S&P downgrades Isola

Standard & Poor's said it lowered the corporate credit rating on Isola USA Corp. to B- from B, along with the rating on its $210 million senior secured loans due 2015 to B- from B.

The 3 recovery rating indicates 50% to 70% expected default recovery.

The outlook is negative.

The downgrade reflects lower-than-expected profits in the quarter ended December 2012 and expectations for a similarly weak first half of 2013, S&P said.

As a result, the agency said it expects leverage to increase to the 10x area over the next two quarters, the agency said.

Increased price competition in the market for the company's high-performance products also could erode its profitability more than expected, resulting in the negative outlook, S&P said.

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