S&P may lift Univar

Standard & Poor's said it placed the B corporate credit rating on Univar Inc. on CreditWatch with positive implications.

The possible upgrade reflects Univar's S-1 filing to issue common stock, with proceeds to be used to repay some debt.

"The expected debt reduction, together with a continuation of favorable operating results, could result in enough improvement to the financial risk profile to support a modest upgrade," S&P analyst Henry Fukuchi noted in a statement.

Ratings reflect the company's highly leveraged capital structure and low operating margin associated with the fragmented and competitive nature of the chemical distribution industry, the agency said.

Offsetting factors are the company's leading market positions; satisfactory product, customer, supplier and geographic diversity; and a flexible cost structure, with margin stability during economic downturns.

As of March 31, Univar's capital structure was highly leveraged with a total adjusted ratio of debt to EBITDA of 4.9x.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.