S&P lifts FMC senior notes from junk

Standard & Poor's said it assigned its BBB- rating to FMC Corp.'s proposed $850 million of senior unsecured credit facilities and affirmed its BBB- corporate credit rating. S&P also raised the ratings on the existing senior notes to BBB- from BB+.

S&P said the upgrade reflects the noteholders' improved recovery prospects following the removal of security supporting the company's bank facilities. Under the previous bank facility arrangements, FMC's noteholders were disadvantaged because bank lenders benefited from a first-priority security interest in domestic accounts receivable and inventory.

The new facilities are unsecured and consist of a $500 million revolving credit facility and a $350 million term loan due 2010, the proceeds of which will be used for letters of credit, to redeem $355 million of 10¼% senior notes and $97.5 million of existing term loans, and for fees and expenses.

S&P said the ratings on FMC reflect a satisfactory business profile derived from well-established positions in industrial, agricultural, and specialty chemicals businesses, and financial policies that support the gradual improvement of credit quality through debt reduction.

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