S&P rates PQ loan BB-

S&P said it rated PQ Corp.’s upcoming $900 million senior secured term loan due 2028 BB- with a 2 recovery rating. The 2 recovery rating indicates an expectation of substantial (70%-90%; rounded estimate: 85%) recovery in default.

“We affirmed all our ratings on PQ, including our B+ issuer credit rating, BB- issue-level rating on its secured debt, and B issue-level rating on its unsecured notes. We intend to withdraw our ratings on the company's incremental term loan once it is fully repaid. Additionally, we will revisit all ratings once the sale of the performance chemicals business is completed,” the agency said in a press release.

The company will use the proceeds to redeem all the $460 million balance under the incremental term loan that it issued in June. Also, it will repay a portion of its original term loan of about $440 million with the remainder of the proceeds. The current term loan balances reflect a partial repayment late in 2020 with proceeds from the sale of PQ's performance materials business, which closed in December, S&P said.

The outlook is stable.

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