S&P cuts Ashland to junk

Standard & Poor's said it lowered its long-term corporate credit and senior unsecured debt ratings on Ashland Inc. to BB+ from BBB- and its short-term corporate credit and commercial paper ratings to B from A-3.

The outlook is stable.

S&P added that the downgrade reflects the expected application of large cash proceeds from the planned sale of Ashland Paving and Construction Inc. for shareholder initiatives rather than business investments.

According to the agency, the ratings on Ashland incorporate the recent definitive agreement to sell the stock of APAC to Oldcastle Materials Inc., noting that Ashland's credit quality also reflects a below-investment-grade business risk profile, which is penalized by weak consolidated operating margins and low discretionary cash flows.

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