23 January 2009 18:54 [Source: ICIS news]
TORONTO (ICIS news)--Credit agency Standard & Poor's (S&P) has lowered its long-term corporate rating for UK-based chemicals major INEOS to reflect “unprecedented weak market conditions” for petrochemical companies in the 2008 fourth quarter and the weak outlook for 2009, it said on Friday.
S&P lowered the rating to “CCC”, from “B-“, with a negative outlook.
The tough markets could result in severe liquidity pressure for INEOS, which already had a highly leveraged financial structure, S&P said.
“We expect INEOS to face very challenging operating trends in 2009 and 2010, given weaker economies and the petrochemical downturn,” the credit analysts said.
The analysts also noted that INEOS would have to renegotiate with lenders in April to obtain a longer-term covenant framework.
INEOS’ ratings would come under pressure if those renegotiations failed or led to substantial increases in interest costs, they added.
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