Ascend Performance Materials Operations LLC

Overview Key strengths Key risks Large integrated, global nylon 6,6 player. Narrow focus on nylon 6,6 and intermediate chemicals. Credit metrics that we expect to remain appropriate for the rating. Operations in cyclical end markets and competitive pressures that change based largely on commodity input prices. Adequate liquidity position. Financial-sponsor ownership. Ascend holds a strong position in the nylon 6,6 business with manufacturing plants across the world. The company maintains modest end-market diversity with an improved product mix. However, the company?s narrow product focus makes it more vulnerable to the cyclicality in its key end markets, such as automotive. Despite the impacts of inflation and continuing supply chain issues, the company has been able to pass costs on to customers

...Ascend Performance Materials Operations LLC's business benefits from being one of only two large, integrated global nylon 6,6 players. Ascend holds a strong position in the nylon 6,6 business with manufacturing plants across the world. The company maintains modest end-market diversity with an improved product mix. However, the company's narrow product focus makes it more vulnerable to the cyclicality in its key end markets, such as automotive. We believe the company's ability to pass on rising costs will help maintain profitability levels in 2022. Despite the impacts of inflation and continuing supply chain issues, the company has been able to pass costs on to customers as most of its long-term contracts are linked to the market index of raw materials. Given the company's strong position in nylon 6,6 business, we expect it will be able to increase prices and maintain relatively stable margins in 2022. However, with the looming recession risk, there is a chance the company's margins may...

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