Moody's rates PQ loans B2, B3

Moody's Investors Service said it assigned B2 corporate family and probability-of-default ratings to PQ Corp., B2 (LGD3, 46%) ratings to its $200 million first-lien revolving credit facility due 2013 and $1.11 billion first-lien term loan due 2014 and a B3 (LGD4, 64%) rating to its $460 million second-lien term loan due 2015.

The outlook is stable.

The rated debt was used to finance the July 2007 acquisition of PQ by funds associated with Carlyle Group and will be used to finance PQ's acquisition of the Ineos Silicas business.

The agency said the B2 corporate family rating reflects PQ's elevated leverage, a revenue base that is expected to be less than initial debt levels, integration risk associated with a new acquisition and initially weak credit metrics.

The ratings are supported by the company's stable inorganic chemicals, catalysts and engineered glass materials businesses with leading market positions and a history of steady revenue growth, Moody's said.

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