S&P changes Tata Chemicals to stable

S&P said it affirmed the B+ corporate credit rating on Tata Chemicals North America Inc. and revised the outlook to stable from positive.

The agency also affirmed the BB issue-level ratings on the company's senior secured debt. The recovery rating remains 1, indicating very high (90%-100%; rounded estimate: 95%) recovery in the event of a default.

S&P said the outlook revision reflects its assessment of the company's weaker-than-expected operating performance over the past 12 months, along with the expectation that credit measures will not improve as much as previously forecasted.

In fiscal 2017 (ended March 31), Tata Chemicals showed top-line growth of about 3.4% driven by volume and demand growth. Despite this, the company’s EBITDA and EBITDA margins were lower, primarily due to ongoing production issues that the agency previously assumed would be resolved.

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