S&P downgrades TPC Group

S&P said it lowered the corporate credit rating on TPC Group Inc. to CCC+ from B-.

The agency also said it lowered the rating on the company's first-lien secured debt to CCC+ from B-. The recovery rating on the debt remains at 4, indicating 30% to 50% expected default recovery.

The outlook is negative.

The company’s trailing 12-month leverage has not improved in recent quarters as expected, S&P explained.

This was due to pricing pressures related to a challenging operating environment and lower product prices, resulting in higher-than-anticipated debt leverage, the agency said.

The company’s financial risk profile continues to be viewed as highly leveraged, S&P said, with an adjusted debt-to-EBITDA ratio of 9.8x.

Fitch also said it expects leverage to remain unsustainable over the next 12 months.

These factors are partially offset by the company's favorable competitive position as one of the largest merchant processors of crude butadiene and an increasing emphasis on value addition, the agency said.

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