S&P slashes OQ Chemicals

S&P said it downgraded OQ Chemicals International Holding GmbH’s issuer rating to CCC- from B. The company’s parent unexpectedly announced it would withdraw its planned equity injection, which it previously communicated to stakeholders for the past months.

Concurrently, the agency said it removed the rating from CreditWatch where it was placed with negative implications on Dec. 18. The outlook is now negative.

“We think that refinancing risks have materially increased and that a financial default is likely. The senior secured term loans, including a €475 million tranche B1 and a $500 million tranche B2 ($432.5 million outstanding), and the revolving credit facilities (RCFs) are due in less than 12 months. OQ Chemicals and its parents have been working on a refinancing plan since last year. However, we understand that the equity injection was one of the main considerations for the lenders to roll over their commitments,” S&P said in a statement.

The agency warned a conventional default or distressed debt exchange would mean another downgrade.

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