Moodys.com
Close
Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
OR
Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

Terms of One-Time Website Use

1.            Unless you have entered into an express written contract with Moody’s to the contrary, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.               

2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

3.            To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.

4.            You agree to read [and be bound by] the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.     

5.            You agree that any disputes relating to this agreement or your use of the Information, whether sounding in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.​​​

I AGREE
Rating Action:

MOODY'S ASSIGNS Ba2 TO TRONOX'S SENIOR SECURED BANK FACILITY AND B1 TO PROPOSED SENIOR NOTES

02 Nov 2005
MOODY'S ASSIGNS Ba2 TO TRONOX'S SENIOR SECURED BANK FACILITY AND B1 TO PROPOSED SENIOR NOTES

$800 Million of Debt Rated

New York, November 02, 2005 -- Moody's Investors Service assigned a Ba2 rating to the $450 million of senior secured credit facilities of Tronox Worldwide LLC (Tronox), an Oklahoma-based company. The senior secured credit facilities consist of a $200 million 6-year secured, term-loan and $250 million five-year, secured revolver. A proposed $350 million seven-year senior unsecured note has been assigned a B1 rating. The corporate family rating of Tronox is Ba3. The ratings reflect the company's position as a leading producer of titanium dioxide (TiO2) -- with 13% global market share -- and relatively modest debt burden. These positives are offset by weak historical operating performance and the presence of an unusually large number of legacy environmental liabilities. The ratings assigned are subject to a complete review by Moody's of the final credit facility and senior note documents and are also subject to the transactions being closed in a manner and with terms that are substantially identical to those that have been shared with Moody's. This is the first time that Moody's has rated the debt of Tronox; the outlook is stable.

The credit facilities and the senior debt are guaranteed by Tronox's parent, Tronox Incorporated ("Holdco") as well as all material domestic subsidiaries. Proceeds from the term-loans, the notes and the proposed initial public offering (IPO) of Holdco will be distributed to Holdco's parent, Kerr McGee Corporation (KMC - Ba3 Corporate Family Rating). Holdco is an unrated indirect subsidiary of KMC and KMC is expected, over the near term, to retain majority control of Holdco, and hence Tronox, after the date of the initial IPO. Over the intermediate term Moody's believes that KMC's ownership will likely decrease significantly and thus there is no material rating benefit to Tronox debt holders derived from KMC's ownership position.

Ratings Assigned

Tronox Worldwide LLC

$250 million five-year, guaranteed, secured, revolver -- Ba2

$200 million six-year, guaranteed, secured, term-loan -- Ba2

$350 million seven-year, guaranteed, senior note -- B1

Corporate family rating -- Ba3

Moody's views Tronox's strong position as a geographically diverse Ti02 manufacturer as its primary credit strength. In addition, the Ba3 rating recognizes Tronox's solid market positions and its stable customer relationships. We believe Tronox operates in a reasonably steady business that exhibits growth potential that is a function of global GDP growth rates. Furthermore Moody's believes that the debt structure, as presented, provides a reasonable amount of financial flexibility to Tronox.

Still, the Ba3 corporate family rating also reflects the company's operating losses from continuing operations over the last three years. These losses resulted, in part, from material restructuring activities in 2004 and 2003 totaling some $174 million that created losses from continuing operations before taxes over the last two years of $183 million. Absent these restructuring charges Tronox's performance over the last two years was essentially break even. However, Moody's recognizes that even with restructuring expenses and cash payments for legacy liabilities Tronox, has been able to generate free cash flow over the last several years (albeit without a material debt burden).

Moody's recognizes that Tronox's TiO2 business is currently benefiting from an improving operating environment in 2005 that has led to some price improvements. Notwithstanding the current positive momentum in TiO2, the proposed company is being levered with debt during a near 20 year peak in TiO2 pricing. However, despite recent price increases experienced in the market, current prices are still below the long term trend.

The anticipated funded debt of $550 million, which represents a 2.5 times LTM June 30, 2005 (estimated) adjusted EBITDA multiple, will add to Tronox's debt and financing costs. Moody's Standard Analytical Debt adjustments add another $125 million to Tronox's debt balances. Additionally, Tronox's weak operating performance in the last several years, notwithstanding the nature of the restructuring actions, makes Moody's wary of assuming that operating margins will dramatically improve from current levels. Moreover, we see Tronox largely as a single product, commodity like, business that carries a higher risk than a more diversified entity.

Moody's believes that Tronox's legacy environmental liabilities, which are in addition to those associated with Tronox's primary business, are a key negative factor when determining the rating. These liabilities are unique in size and complexity. Tronox will have liabilities relating to the remediation of various sites at which chemicals such as creosote, perchlorate, low-level radioactive substances, asbestos and other materials have been used or disposed. Tronox's financial condition and results of operations could be adversely affected by these liabilities and Tronox could suffer losses as a result of these liabilities even if the primary business performs well. As of June 30, 2005, Tronox has reserves in the amount of $259 million for environmental remediation and restoration up from $216 million at December 31, 2004. Moody's recognizes that there is a level of concentration in these liabilities as well as the presence of some potential reimbursements along with a long lived history and track record of addressing these issues. Nevertheless, we are cautious as to the assumption that the net cash requirements are likely to rapidly diminish in the next few years. Additions to the reserves are likely to be required as additional information is obtained that enables Tronox to better estimate its liabilities, including liabilities at sites now under review. However it is difficult to reliably estimate a range of future additions to the reserves for any individual site or for all sites collectively. In future periods, a number of factors could significantly change estimates of environmental remediation costs, such as changes in laws and regulations, revisions to the remedial design, unanticipated construction problems, identification of additional areas or volumes of contamination, and changes in costs of labor, equipment and technology.

Tronox's stable outlook considers the strength of its franchise in terms of its market positions and long-lived customer relationships, and is supported by the relatively modest leverage of its balance sheet. If operating performance is weaker than anticipated or a material increase in environmental liabilities were to occur, the outlook or rating could turn negative. To the extent that Tronox reduces debt faster than expected, such that debt/EBITDA metrics improve to under 1.5X times or less on a permanent basis or if environmental liabilities were deemed to be much improved a positive change in outlook or rating could occur.

Structurally, the Ba2 assigned to the credit facilities reflects their senior secured position in the capital structure. Asset coverage in a distressed scenario does provide the support necessary to move the rating to Ba2 given its secured position. Moody's views the level of asset coverage in a distressed scenario as adequate. The credit facility will be guaranteed by Holdco and Tronox's direct and indirect material domestic subsidiaries. Specifically, the credit facility will be secured by a pledge of 100% of the equity interests in Tronox along with a pledge of 100% of the capital stock of, or other equity interests in, Tronox's direct and indirect domestic subsidiaries. The credit facility will also be secured by a pledge of the capital stock of, or other equity interests in, Tronox's direct foreign subsidiaries and the direct foreign subsidiaries of the guarantors of the senior secured credit facility, up to 65% of the voting and 100% of the non-voting capital stock or other equity interests outstanding; and a first priority security interest in certain domestic assets of Tronox and the guarantors of the senior secured credit facility. The senior notes are rated B1, a notch lower than the Ba3 corporate family rating, reflecting their unsecured position in the capital structure and potential for loss in a default scenario.

Tronox, headquartered in Oklahoma City, Oklahoma, is a leading manufacturer of TiO2.

TiO2 is a white pigment used in a wide range of products for its exceptional ability to impart whiteness, brightness and opacity. Sales for the last twelve months ending December 31, 2004 were $1.3 billion.

New York
Mark Gray
Managing Director
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
William Reed
VP - Senior Credit Officer
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

No Related Data.
© 2019 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

​​​​​​
Moodys.com