New York, August 23, 2022 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings -and other ratings that are associated with the same analytical units for the rated entity(entities) listed below.
The review was conducted through a portfolio review discussion held on 16 August 2022 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. A possible outcome from periodic reviews is a referral of a rating to a rating committee.
This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement.
Key Rating Considerations
The principal methodology used for this review was Chemicals published in June 2022. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.
Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.
Scale: Scale is considered because it is an indicator of a company's revenue-generating capability and its resilience to shocks, such as sudden shifts in demand or rapid cost increases. Scale also greatly influences a chemical company's market strength and the availability of capital. Additionally, scale is an important indicator of a chemical company's capacity to sustain earnings and generate cash flow. Scale can provide indications of a chemical company's other strengths, including resilience to changes in product demand, cost absorption, research and development capabilities and bargaining strength with customers and raw material suppliers. Scale is measured using total reported revenue, and net property, plant & equipment.
Business Profile: The business profile of a chemical company is important because it greatly influences its ability to generate sustainable earnings and operating cash flows. Our assessment is based on our expectations for cash flow volatility. Core aspects of a chemical company's business profile are its market position, product and geographic diversity, operational execution as well as technological leadership and market position prospects, all of which can reduce volatility through economic cycles.
Profitability: Profitability is an important indicator of a chemical company's strength and durability and can reflect the competitiveness of its product portfolio. It provides some indication of a chemical company's ability to withstand economic downturns, reinvest in fixed assets and service debt and other obligations. Relative cost position is important for chemical companies because in cyclical or economic downturns, product prices often decline to the point where only companies with lower costs generate meaningful cash flow. Profitability can be an important indicator of how much value a company's products add and whether they are specialty in nature or commodity-like, or of its operating cost efficiency. A chemical company's operating cost position is a function of a number of characteristics that include its size, access to low-cost raw materials, location of assets, labor costs and capital invested. EBITA Margin and Return on Average Assets are indicators of profitability.
Leverage and Coverage: Leverage and cash flow coverage measures provide important indications of a chemical company's financial flexibility and long-term viability. Strength in this area is an indicator of a company's investment capabilities, and its ability to withstand business cycle fluctuations and respond to unexpected challenges. Among others, ratios such as Debt/ EBITDA, Retained Cash Flow/ Debt, and EBITDA/ Interest Expense are indicators of leverage and coverage.
Financial Policy: Financial policy encompasses management and board tolerance for financial risk and commitment to a strong credit profile. It is an important rating determinant, because it directly affects debt levels, credit quality, the future direction for the company and the risk of adverse changes in financing and capital structure. Financial risk tolerance serves as a guidepost for investment and capital allocation. Liquidity management is also an important aspect of overall risk management and can provide insight into risk tolerance.
Other Factors: Other factors may include, but are not limited to, financial controls and the quality of financial reporting; corporate legal structure; the quality and experience of management; assessments of corporate governance as well as environmental and social considerations; exposure to uncertain licensing regimes; and possible government interference in some countries. Regulatory, litigation, liquidity, technology, and reputational risk as well as changes to consumer and business spending patterns, competitor strategies and macroeconomic trends are also considered.
This announcement applies only to Rated Entities with EU rated, UK rated, EU endorsed and UK endorsed ratings. Rated Entities, with Non EU rated, non UK rated, non EU endorsed and non UK endorsed ratings may be referenced herein to the extent necessary, if they are part of the same analytical unit.
Please see the Issuer page on https://ratings.moodys.com for each of the ratings covered, most updated credit rating action, rating history, and Credit Rating action Press Release including the rating rationale and factors that could lead to a rating upgrade or downgrade.
List of Issuers/Rated Entities
Air Products and Chemicals, Inc.
Alchemy US Holdco 1, LLC
American Rock Salt Company LLC
ARC Falcon I, Inc.
Aruba Investments Holdings, LLC
Ascend Performance Materials Operations LLC
ASP Chromaflo Holdings II, LP
ASP Unifrax Holdings, Inc.
Avery Dennison Corporation
Axalta Coating Systems Ltd.
Bakelite US HoldCo, Inc.
Blue Tree Holdings, Inc.
Celanese US Holdings LLC
CF Industries, Inc.
Chemours Company, (The)
Chevron Phillips Chemical Company LLC
Compass Minerals International, Inc
CSTN Merger Sub, Inc.
CVR Partners, LP
Cyanco Intermediate 2 Corp.
DCG Acquisition Corp.
Diamond (BC) B.V.
Discovery Purchaser Corporation
Dow Chemical Company (The)
DuPont de Nemours, Inc.
E.I. du Pont de Nemours and Company
Eagle Intermediate Global Holding B.V.
Eastman Chemical Company
Element Solutions Inc
GCP Applied Technologies Inc.
GEON Performance Solutions, LLC
GPD Companies, Inc.
H.B. Fuller Company
Hexion Holdings Corporation
Highline Aftermarket Acquisition, LLC
Innophos Holdings, Inc. (New)
International Flavors & Fragrances, Inc.
INVISTA Equities, LLC
Koppers Holdings Inc.
Kronos Worldwide, Inc.
LSB Industries, Inc.
LSF11 A5 HoldCo LLC
Lummus Technology Holdings V LLC
LyondellBasell Industries N.V.
Meridian Adhesives Group, Inc.
Messer Industries GmbH
Minerals Technologies Inc.
Momentive Performance Materials Inc.
Mosaic Company (The)
NIC Acquisition Corp.
NOVA Chemicals Corporation
Olympus Water US Holding Corporation
Plaskolite PPC Intermediate II LLC
PMHC II, Inc,
Polar US Borrower, LLC
Polymer Additives, Inc.
Potters Borrower, LP
PPG Industries, Inc.
Rinchem Company, LLC
RPM International Inc.
SCIH Salt Holdings Inc.
Sherwin-Williams Company (The)
SK Invictus Intermediate II S.a.r.l.
Sparta U.S. HoldCo LLC
Tronox Holdings Plc
Univar Solutions Inc.
Vantage Specialty Chemicals, Inc.
Venator Materials plc
W.R. Grace Holdings LLC
This publication does not announce a credit rating action.
For any credit ratings referenced in this publication, please see the issuer/deal page on https://ratings.moodys.com
for the most updated credit rating action information and rating history.
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