S&P raises Chemours

S&P said it upgraded its ratings on the Chemours Co. to BB- from B+, its senior secured term loan to BB+ from BB and its senior unsecured notes to BB- from B. The 1 (95% point estimate) recovery rating on the term loan remains unchanged; however, the agency revised the recovery rating on the unsecured notes to 4 from 5. The 4 recovery rating indicates an expectation for average (30%-50%; rounded estimate: 35%) recovery in default.

“The upgrade reflects Chemours' stronger-than-expected operating results in the first-half 2021 as it continued to increase its margins and EBITDA on positive pricing actions and the strong economic rebound in its end markets. The recovery in the company's earnings, combined with the reduction in its outstanding unsecured notes in August 2021, will boost its cash flow and leverage metrics to levels that exceed our previous assumptions,” S&P said in a press release.

Additionally, the agency said it forecasts Chemours' funds from operations to total debt will be more than 20% over the next two years on a weighted-average basis.

The outlook is stable.

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