Moody’s downgrades Hexion, notes

Moody's Investors Service said it lowered Hexion Inc.’s corporate family rating to Caa2 and assigned a Caa1 rating to $460 million guaranteed senior secured first-lien notes due December 2022 to be issued by Hexion 2 U.S. Finance Corp., a wholly owned unrestricted subsidiary of Hexion.

Additionally, the agency downgraded the ratings on Hexion's first-lien debt to Caa1 from B3, secured (1˝-lien) notes due 2018 to Caa3 from Caa2, second-lien notes to Ca from Caa3 and unsecured notes to C from Ca.

Moody's also lowered the speculative grade liquidity rating to SGL-4 from SGL-3.

The outlook remains negative.

The $460 million proceeds from the new first-lien notes will be placed into escrow, and will be released once Hexion has arranged for the repayment of the 8 7/8% secured (1˝-lien) notes due 2018. The debt will then become an obligation of Hexion.

"While the issuance of additional first lien notes and additional secured debt will alleviate the company's debt maturity in 2018, Hexion will have a much more difficult task refinancing its 2020 maturities without a meaningful improvement in profitability," Moody’s senior vice president John Rogers said in a news release.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.