Moody's ups Rhodia notes to B1

Moody's Investors Service said it upgraded Rhodia SA's corporate family rating to Ba3 and assigned probability of default rating for the group at Ba3. Moody's also upgraded its senior secured notes to B1 and assigned LGD assessment at LGD4 (69%). The proposed convertible notes are rated provisional B1, LGD4 (69%). The ratings on the subordinated 2011 notes and senior 2010 notes will be withdrawn following the proposed refinancing. The outlook is stable.

The upgrade reflects the improved resilience of Rhodia's operations shown in 2006, as well as a stronger business profile of the group, reflecting the portfolio realignment and consolidation of the position in selected core businesses, Moody's said.

The upgrade also recognizes steady deleveraging on its balance sheet, the agency said. At the end of the year, Rhodia's total debt-to-EBITDA ratio was 3.6x.

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