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 Baa2 to Albemarle's $1.6 billion new notes issuance

08 Nov 2019

New York, November 08, 2019 -- Moody's Investors Service (Moody's) assigned Baa2 ratings to Albemarle's proposed $1.6 billion USD equivalent new debt financing, consisting of EUR notes to be issued by Albemarle New Holdings GmbH; notes to be issued by Albemarle Corporation; and notes to be issued by Albemarle Wodgina Pty Ltd. The debt issued by Albemarle New Holdings GmbH and Albemarle Wodgina Pty Ltd are unconditionally guaranteed by Albemarle Corporation. The size and tenor of debt issued by each of the aforementioned entities will depend on market demand. Proceeds are to be used to refinance the $1.0 billion delayed draw term loan which was used to finance ALB's cash portion of the new joint venture (MARBL) transaction with Mineral Resources Ltd (unrated); Albemarle will own 60% of MARBL which owns the Wodgina spodumene (lithium) rock mine in Australia. Use of proceeds will also refinance $175 million bonds due 2020, reduce commercial paper outstanding and for general corporate purposes. The Prime-2 (P-2) rating on the company's CP program remains unchanged and the outlook on the ratings is stable.

"The Wodgina mine is among the largest rock mines in terms of reserves and will produce 6% spodumene -- the rock-derived lithium raw material -- used to produce lithium hydroxide (LiOH) for EV batteries, according to Joseph Princiotta, SVP at Moody's. "Despite the substantial increase in lithium hydroxide capacity by 2021 supported by this transaction, the debt-financed investment increases debt by about $1.1 billion and moderately stresses the balance sheet for the current ratings," Princiotta added.

Assignments:

..Issuer: Albemarle Corporation

....Senior Unsecured Regular Bond/Debenture (Local Currency), Assigned Baa2

..Issuer: Albemarle New Holdings GmbH

....GTD Senior Unsecured Regular Bond/Debenture (Foreign Currency), Assigned Baa2

..Issuer: Albemarle Wodgina Pty Ltd.

....GTD Senior Unsecured Regular Bond/Debenture (Local Currency), Assigned Baa2

Outlook Actions:

..Issuer: Albemarle New Holdings GmbH

....Outlook, Assigned Stable

..Issuer: Albemarle Wodgina Pty Ltd.

....Outlook, Assigned Stable

RATINGS RATIONALE

Albemarle's credit profile reflects strong margins, diverse and leading technologies, strong and unique raw material sources, and strong business positions across its bromine and lithium-based portfolio, with leading market shares and limited number of competitors in each of the three segments -- Lithium, Bromine and Catalysts. The profile also incorporates a certain level of event risk given the forces in the lithium industry and the company's strategic focus to expand its lithium portfolio in step with the fast-growing EV market.

The $1.3 billion consideration value of the MARBL deal consists of the $820 million cash component (plus stamp tax and other costs) plus Albemarle's contribution of its two LiOH facilities in Kemerton, Australia, valued at $480 million and which are currently under construction and expect to be completed in 2021. The MARBL deal closed on November 1, 2019 and was financed with the $1.0 billion delayed draw term loan, which is being refinanced with this multiple bond issuance.

The Wodgina hard rock lithium mine located in the Pilbara region of Western Australia will produce up to 750 Ktpa of 6% spodumene, enough to provide feedstock for the future Kemerton facilities to produce roughly up to 100 kilotonnes (KT) of LiOH. The first phase of the Kemerton build is targeted to produce 50KT in 2021. The Wodgina mine is expected to be idled until the Kemerton operations are completed.

Gross adjusted leverage is expected to increase to the low-to-mid 3.0x range and is likely to remain elevated until ALB's LiOH capacity steps up in late 2020 and 2021. From a base of roughly 85 KT LCE capacity estimated at year end 2019, completion of the La Negra III and IV projects in Chile in late 2020 and 2021 will add close to 40 KT while the Kemerton project will add another 30 KT (ALB's 60% share), bringing total capacity to 255 KTs, or more than an 80% increase in capacity vs. 2019. The new supply is targeted to serve the robust secular growth in EV batteries, and the new volumes will contribute to meaningful EBITDA growth, but lithium prices are likely to continue to remain under pressure for the next few years as industry supply outpaces demand. Albemarle's projected EBITDA in 2020 has been guided down 10% from its estimated 2019 EBITDA by the company.

Moody's views the transaction as positive longer term but stressing the ratings credit metrics immediately following the transaction and through 2020 and into 2021. The deal also comes at a time when capex is elevated to build out new capacity at the La Negra facilities in Chile and for other uses. Capex in the $900-$1.0 billion range in 2019 and 2020 ensures that free cash flow will remain negative and is being financed this year with a draw-down of cash balances and next year with further use of cash as well as proceeds from asset sales. Free cash flow is targeted to be positive in 2021, and we estimate this is feasible, with metrics projected to improve into the mid-to-high 2.0x range in 2021. These metrics include Moody's standard adjustments that add roughly $700 million to debt.

Despite the stressed metrics, Moody's believes the company's financial policies remain consistent with strong investment grade ratings and do not expect to see another M&A transaction near this magnitude until leverage recovers to roughly the level proceeding this transaction.

Albemarle's liquidity is adequate and consists of $461 million of availability under its $1.0 billion credit facility/CP program and $318 million in balance sheet cash, offset by negative free cash flow expected in 2019 and 2020 (due to extensive capex). The $1.0 billion credit facility matures in August 2024. The Prime-2 (P-2) short term rating on the company's CP program is supported by the committed unused portion of the $1.0 billion credit facility. At September 30, 2019, CP usage was $539 million; outstandings under the credit facility were zero. The credit facility has one financial covenant -- a maximum consolidated leverage covenant of 3.5x, increasing to 4.0x for four consecutive quarters upon consummation of an acquisition. The company is expected to remain in compliance with its covenants through 2020. An additional $1.2 billion credit facility was drawn in October 2019 to fund the Wodgina project and for general corporate purposes. Drawings under this facility are being repaid with proceeds from this bond issuance.

The stable outlook anticipates conservative balance sheet policies with management targeting net leverage (unadjusted) in the range of 2.0-2.5x over time (roughly equal to Moody's gross adjusted leverage of 2.5-3.0x). The stable outlook also anticipates no additional M&A transactions of significant scale or near this magnitude until leverage recovers to roughly the level proceeding this transaction.

Moody's would consider a downgrade if Albemarle entered into additional acquisitions or transformational transactions that would overly stress the balance sheet and result in expected delays in leverage recovery. Moreover, if gross leverage following the MARBL venture and Wodgina mine investment failed to recover to below 3.0x by year end 2021, a downgrade would also be considered. An upgrade is not being considered at this time. But we would eventually consider an upgrade once significant progress is made in its longer-term lithium growth plan, event risk subsides, and RCF/TD exceeds 30% and gross adjusted leverage is falls below 2.5x, on a sustained basis.

Albemarle Corporation (Albemarle), headquartered in Charlotte, North Carolina, is a global producer of lithium and bromine products, catalysts (mostly for oil refining), and specialty chemicals including flame retardants and fine chemicals for use in a diverse set of end markets. Albemarle operates through the following business segments: Lithium and Advanced Materials, Bromine Specialties, and Refining Solutions. Revenues were approximately $3.5 billion for the twelve months ended September 30, 2019.

The principal methodology used in these ratings was Chemical Industry published in March 2019. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Joseph Princiotta
Senior Vice President
Corporate Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

Glenn B. Eckert
Associate Managing Director
Corporate Finance Group
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

No Related Data.
© 2020 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/OR ITS CREDIT RATINGS AFFILIATES ARE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY'S (COLLECTIVELY, "PUBLICATIONS") MAY INCLUDE SUCH  CURRENT OPINIONS. MOODY'S INVESTORS SERVICE 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 INVESTORS SERVICE CREDIT RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS ("ASSESSMENTS"), AND  OTHER 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. AND/OR ITS AFFILIATES. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND  PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND  PUBLICATIONS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY'S ISSUES ITS CREDIT RATINGS, ASSESSMENTS AND OTHER OPINIONS AND PUBLISHES  ITS 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, ASSESSMENTS, OTHER OPINIONS, AND 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, ASSESSMENTS, OTHER OPINIONS OR  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.

MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND 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 its 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, ASSESSMENT, 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 credit rating, agreed to pay to Moody's Investors Service, Inc. for credit ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and Moody's investors Service also maintain policies and procedures to address the independence of Moody's Investors Service credit ratings and credit rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold credit ratings from Moody's Investors Service 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 credit rating, agreed to pay to MJKK or MSFJ (as applicable) for credit 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