09 May 2008 22:41 [Source: ICIS news]
HOUSTON (ICIS news)--Rating agency Standard & Poor’s (S&P) said on Friday that it has lowered its credit ratings on Georgia Gulf to CCC+ from B- because of the weaker-than-expected first-quarter operating performance by the US polyvinyl chloride (PVC) producer.
S&P said it was also concerned whether Georgia Gulf would be able to improve its financial performance amid a severe downturn in the US housing market that has crippled demand for vinyl construction materials.
Moreover, additional US PVC production capacity is expected to come online in the second quarter, and that could oversupply the market, S&P said.
The rating agency said it may lower its credit rating for Georgia Gulf further if the company is unable to meet tightening financial covenants in 2008 or if its liquidity does not improve.
Earlier this week, Georgia Gulf reported a first-quarter operating loss of $45m (€29m), down 463% from a loss of $8m that it reported for the same time last year.
Restructuring cost the company $26.1m, as it closed a 227,000 tonne/year PVC plant in Oklahoma City, Oklahoma. Georgia Gulf also sold its outdoor storage-building business for $13m.
($1 = €0.65)
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections