S&P: Borden on watch, Resolution Performance on watch positive

Standard & Poor's placed its B+ corporate credit rating and other ratings for Borden Chemical Inc. on CreditWatch negative, citing the company's announcement of a sizable merger, a large dividend payment and a proposed initial public offering.

S&P also placed its B+ corporate credit rating and other ratings for Resolution Specialty Materials LLC on CreditWatch negative.

At the same time, S&P placed its B- corporate credit rating and other ratings for Resolution Performance Products LLC on CreditWatch positive.

On watch negative are Borden Chemical's B+ corporate credit rating, B- senior unsecured debt rating and BB- senior secured bank loan rating, Borden U.S. Finance Corp.'s and Borden Nova Scotia Finance ulc's B- rated $475 million senior secured notes and Resolution Specialty's B+ corporate credit rating and B+ rated $155 million senior secured bank credit facility.

On watch positive are Resolution Performance Products' B- corporate credit rating, CCC subordinated debt rating, CCC+ senior secured notes rating and B rated senior secured notes due 2009.

S&P said the CreditWatch placements follow the announcement that Borden Chemical, Resolution Performance Products and Resolution Specialty Materials will combine and undertake an initial public offering.

The transactions also include a $550 million dividend payment to shareholders, which is expected to occur following the combination but before the IPO.

The proposed combination would be a meaningful strategic initiative for Borden, Resolution Performance Products and Resolution Specialty Materials, as S&P said it would create a company with a more diversified product portfolio, technology base, end market slate and geographic sales base.

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