S&P lowers OQ Chemicals

S&P said it lowered its ratings for OQ Chemicals International Holding GmbH and its loans borrowed through OQ Chemicals Holding Drei GmbH to B from B+ and placed them on CreditWatch with negative implications. The recovery rating on the loans remains 3 (60%).

“The senior secured term loans, including €475 million tranche B1 and $500 million tranche B2 ($435 million outstanding) are due in less than 12 months. For this reason, we assess OQ Chemicals' liquidity as weak. Positively, we understand that the company has no material debt repayments before October 2024 when the term loans are due. The €102.5 million revolving credit facility (RCF) is available, with the exception of €11.1 million of long-term bank guarantees,” the agency said in a press release.

S&P added “The company recently indicated that it is looking to secure a long-term solution to its debt maturities in the coming months. We will monitor any progress or lack of progress on the refinancing of OQ Chemicals' financial debt.”

The negative watch indicates a downgrade in the next two months could be in the offing it OQ does not demonstrate progress on refinancing its debt. “We could also lower the ratings by more than one notch if OQ Chemicals were to launch an exchange offer or maturity extension for its outstanding loans that could compromise its original promise and that we view as distressed,” S&P said.

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