Moody's cuts Cornerstone Chemical

Moody's Investors Service said it downgraded CSTN Merger Sub, Inc.'s (Cornerstone Chemical Co.) corporate family rating to Caa2 from B3 and its senior secured global notes rating to Caa2 from B3.

"2022 proved to be a tough year with outages in the second and third quarters and reduced demand in the fourth quarter. Lower sales volumes and margins have continued into the first quarter of 2023 due to the influence of Chinese exports on the global markets for acrylonitrile and melamine, as well as the unfavorable impact of a propylene supply disruption. As a result, we anticipate that credit metrics and liquidity will be under pressure," said John Rogers, a Moody’s senior vice president and lead analyst for CSTN,” in a press release.

The agency noted the company has a $20 million interest payment due on Sept. 1, but had less than $25 million in availability on its asset-based lending facility at March 31 and less than £3 million of availability on its £9 million facility at March 31.

The outlook is negative.

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