Ascend Performance Materials Operations LLC

The stable outlook reflects our expectation that Ascend will maintain appropriate credit metrics for the rating despite the macroeconomic downturn caused by the COVID-19 pandemic. We believe Ascend will maintain weighted-average debt to EBITDA at or below 4x and FFO to debt of greater than 20%. Our forecast projects Ascend's earnings will decline in 2020 as a result of the macro-environment and its impact on sectors that affect Ascend, such as the auto sector. Our stable outlook reflects our expectation that Ascend would not pursue any large, debt-funded shareholder rewards or acquisitions. We could take a negative rating action if Ascend's end-market demand weakens more than we expect and sales of higher-margin products decline, leading to lower EBITDA margins than

...Ascend Performance Materials Operations LLC's business benefits from being one of only two large, global nylon 6,6 players. The company also maintains modest end-market diversity and has an improved product mix. However, it has a relatively narrow focus on nylon 6,6 and intermediate chemicals. Despite challenging macroeconomic conditions, we expect that Ascend will maintain credit metrics appropriate for the rating. We expect that the company will be hurt by the macroeconomic downturn resulting from the COVID-19 pandemic, but, we believe Ascend's credit measures have some cushion that will allow it to maintain weighted-average debt to EBITDA at or below 4x and funds from operations (FFO) to debt of greater than 20%. We expect Ascend will maintain sufficient liquidity over the forecast period. We believe Ascend's sources will exceed uses by at least 1.2x over the next year, and we expect sources less uses to remain positive even if EBITDA drops 15%....

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