Moody's assigns Ba2 to Synthos

Moody's Investors Service said it assigned a Ba2 corporate family rating and a Ba2-PD probability of default rating to Synthos SA. Concurrently, Moody's assigned a Ba2 rating to its planned €500 million of guaranteed senior secured notes due 2028. The outlook is stable.

“The Ba2 CFR reflects Synthos' strong position in the European markets for styrene butadiene rubber as well as expandable, general purpose and high-impact polystyrene. Around 38% of its legacy output (before the proposed transaction to buy the synthetic rubber assets of Trinseo SA (Ba3, negative)) by volume is to the construction industry, where Synthos benefits from structural demand growth, primarily for building insulation. Around 35% of the output is to tire manufacturers, of which around 75% is to the tire replacement market that Moody's considers fairly defensive relative to the remaining 25% that are indirectly sold to automobile OEMs whose demand tends to be more volatile,” Moody’s said in a press release.

The outlook assumes a revenue and EBITDA recovery from the pandemic in 2021 and beyond and reflects an increasing contribution from dispersions, adhesives, latex and agro chemical operations, the agency said.

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