World's second-largest producer in the highly concentrated silicones market; Above-average long-term growth prospects for silicones; and Strong diversification by customer, product, and region. Very aggressive debt leverage; Vulnerability to raw material cost increases and economic slowdowns; Heavy reliance on reductions in working capital and operating costs to generate positive operating cash flow; and Low return on capital. The ratings on silicones and quartz producer Momentive Performance Materials Inc. reflect its satisfactory business risk profile as a leading global silicones producer and its very high debt leverage following Apollo Management's December 2006 acquisition of 90% of the company from General Electric Co. (GE) for $3.9 billion. Wilton, Conn.-based Momentive is the world's second-largest silicone producer, representing about 90% of its revenues.
