S&P hikes TPC

S&P said it raised TPC Group Inc.’s issuer rating to B- from D and assigned its planned $350 million of senior secured notes due 2027 B+ and 1 recovery ratings.

TPC emerged from bankruptcy on Friday after filing for protection under Chapter 11 in June. The bankruptcy court approved its restructuring plan on Dec. 1.

The company's post-emergence capital structure will consist of a $200 million asset-based lending facility, $350 million senior secured notes, and $230 million payment-in-kind notes issued by the holding company that are expected to be fully redeemed early next month.

“We expect they will be redeemed using proceeds from TPC's insurance settlement with insurers on Port Neches Operations (PNO) explosion claims. The company expects to collect these claims under its property damage and business interruption policies in the coming weeks,” the agency said in a press release.

“As the reorganization takes effect and the holding company notes are redeemed, TPC's leverage and liquidity will significantly improve relative to pre-bankruptcy levels. With the revised capital structure, we expect the ratio of funds from operations (FFO) to total debt to be about 20% and the ratio of adjusted debt to EBITDA modestly above 3x,” S&P noted.

The outlook is stable.

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