Moody's turns Trinseo view to negative

Moody's Investors Service said it revised the outlook for to negative from stable for Trinseo plc and its subsidiary, Trinseo Materials Operating SCA, after the announcement of fourth-quarter earnings and affirmed their ratings. Moody's also lowered its speculative grade liquidity rating to SGL-3 from SGL-1.

“The move to a negative outlook reflects the expected delay in returning financial performance to levels that would adequately support the rating with management projecting EBITDA of $375 million-425 million, and breakeven free cash flow for 2023, which would leave leverage close to, or above, 6x. If quarterly EBITDA fails to rise close to, or above, the $100 million rate by the second quarter of 2023 and the quarterly run rate is not closer to $150 million by year-end 2023, or the first quarter of 2024, then there would be further downward pressure on the rating,” the agency said in a press release.

Additionally, Moody’s noted Trinseo will need to refinance its $655 million secured term loan due in September of 2024, which will mean increased interest expense.

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