World's second-largest producer in the highly concentrated silicones market, with good diversification by customers, products, and regions; and Favorable long-term growth prospects for silicones. Sharp earnings drop during the current recession; Potential near-term financial covenant violation; and Extremely high debt leverage and questionable ability to meaningfully reduce it. Albany, N.Y.-based Momentive Performance Materials Inc. has extremely high leverage. As of March 29, 2009, total adjusted debt was close to $4 billion, and total adjusted debt to EBITDA was well into the double digits. We adjust debt to include about $500 million of pay-in-kind seller notes at the parent holding company, about $125 million in underfunded, tax-effected postretirement obligations, and $40 million of capitalized operating leases. Since then, the company reduced
