Fitch slashes TPC Group

Fitch Ratings said it downgraded TPC Group, Inc.'s long-term issuer default rating to CCC- from B-, its asset-based loan facility rating to B-/RR1 from BB-/RR1 and its 10½% notes ratings to CC/RR5 from B-/RR4.

Fitch, however, said it affirmed the 10 7/8% notes at B- but revised the recovery rating to RR1 from RR4 given that the 10½% notes are effectively subordinated to the 10 7/8% notes.

“Fitch believes TPC will enter restructuring negotiations with its lenders. The company has roughly $50 million due in February 2022 across its $153 million of 10 7/8% first-priority lien notes due 2024 and $930 million of 10½% first-lien notes due 2024. In isolation, Fitch believes the combination of TPC's operations and proceeds from its insurance proceeds related to the Port Neches incident should be enough to support the company's liquidity position through such a payment. However, frequent operational issues have weighed on the company's already strained liquidity profile,” the agency said in a press release.

TPC has started to realize certain positive macroeconomic trends, with liquidity rebounded to more than $75 million, but its ability to continue to achieve positive liquidity momentum is constrained by frequent operational disruptions, Fitch noted.

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