Moody's lowers Solvay to Baa2

Moody's Investors Service said it downgraded Solvay SA and its guaranteed subsidiaries senior unsecured ratings to Baa2/provisional Baa2 from Baa1/provisional Baa1.

Concurrently, the ratings of the bonds issued by Rhodia SA, a subsidiary of Solvay, were downgraded by one notch to Baa3 from Baa2, and the ratings assigned to the hybrid notes issued by Solvay Finance SA were downgraded and assigned definitive Ba1/Ba1 from Baa3/provisional Baa3. Solvay Finance (America) Inc.'s short-term P-2 ratings are not affected.

The outlooks were changed to stable from negative.

"Solvay's Baa2 ratings are positioned to reflect Moody's reduced expectations for the pace of recovery in operating performance in 2014/2015, particularly in several businesses, such as Rare Earth Systems, Essential Chemicals and Functional Polymers versus expectations developed post Rhodia acquisition. As Solvay maintains high cash balances, we expect that reduction in gross debt will underpin a steady improvement in gross leverage metrics, while the upturn in earnings and operating cash flow generation will take longer than expected," Elena Nadtotchi, Moody's vice president senior credit officer and lead analyst for Solvay, said in a news release.

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