2017 Outlook: North American Chemicals (Portfolio Actions to the Fore)

...Stable Outlook: Market conditions support stable operating profiles for 2017. Most rated North American issuers have solid financial profiles and robust liquidity. Producers should benefit from solid recovery in U.S. construction and consumption, even though the sector is comprised of many heterogeneous products, each with its own competitive dynamics and end-market exposure. Fitch Ratings believes agricultural, oilfield, and metals and mining chemicals will continue to be challenged in 2017. Portfolio Transformation Continues: Diversified manufacturers have been shedding noncore operations, and specialty chemicals companies have been selling or spinning off businesses with a view to improving overall valuation. Fitch evaluates these transactions individually to assess the loss of diversification and size, as well as the use of proceeds. Merger and acquisition activity is a hallmark of the sector and continues to represent the bulk of event risk. Slowdown of Investment Spending: Fitch believes...

Outlook