S&P rates PQ loan B+, notes B-, lifts Eco Services

Standard & Poor’s said it affirmed the B corporate credit ratings on PQ Corp. and Eco Services Operations LLC.

The agency also said it revised the outlook on both companies to stable from developing.

S&P also said it assigned a B+ rating and 2 recovery ratings to PQ’s proposed first-lien term loan B and to the proposed secured notes.

The 2 recovery rating indicates 70% to 90% expected default recovery.

S&P also said it assigned a B- rating and 5 recovery rating to PQ’s proposed senior unsecured notes. The 5 recovery rating indicates 10% to 30% expected default recovery.

The agency also said it raised the rating on Eco Services’ senior unsecured notes to B- from CCC+ and revised the recovery rating to 5 from 6, respectively, which is in line with expected pro forma unsecured debt ratings.

The 5 recovery rating indicates 10% to 30% expected default recovery.

The B+ rating and 2 recovery ratings on the company’s secured debt are unchanged.

The 2 recovery rating indicates 70% to 90% expected default recovery.

S&P said it will withdraw the corporate credit rating and debt ratings on Eco Services upon closure of the merger as proposed.

The ratings reflect PQ’s highly leveraged financial risk profile and fair business risk profile pro forma for the acquisition, the agency explained.

The stable outlook indicates that PQ’s creditworthiness will remain relatively the same after the merger, albeit with a slightly improved business risk profile, S&P said.

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