Moody's lowers INEOS rating after waiver request

18 November 2008 15:50  [Source: ICIS news]

LONDON (ICIS news)--Moody’s Investors Service has downgraded its credit rating for UK-based petrochemicals major INEOS after it asked its senior creditors for a waiver from some of its financial covenants, it said on Tuesday.

 

INEOS’ corporate family rating was reduced to B3 from B1, signifying that the company is subject to increasingly high credit risk and has “generally poor credit quality”.

 

The rating was also placed under review for a further downgrade, noting that INEOS’ significant negative inventory holding - expected to be €560m ($709m) in the fourth quarter - would restrict its headroom under some financial covenants.

 

Moody’s said it would monitor the waiver discussions as of part of its review, assessing whether the company could comply with banks given the cyclical downturn its petrochemicals activities currently faced.

 

INEOS has now entered a 15-day period in which banks holding €5bn of the its debt must decide whether to accept a request for a waiver of loan covenants.

 

Two thirds of 230 banks with the right to vote on the INEOS syndicated debt must vote in favour of the company’s proposal for it to be successful.

 

INEOS on Tuesday posted a 20% drop in third-quarter EBITDA (earnings before interest, tax, depreciation and amortisation) to €402m, down from €504m in the same period last year.

 

($1 = €0.79)

 

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By: Mark Watts
+44 20 8652 3214

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