U.S.-based silicone and quartz producer Momentive Performance Materials Inc. (MPM) is issuing $250 million of senior secured notes (instead of the planned $450 million) and using net proceeds to repay senior secured term loans. We are raising our ratings on MPM's and its subsidiaries' senior secured credit facilities and removing them from CreditWatch. We are affirming all our other ratings on the company, including the 'B-' corporate credit rating, and the 'B-' issue rating and '4' recovery rating on the new notes. Although the transaction lengthens debt maturities and eases covenant pressures, the negative outlook indicates that earnings and cash flow may not recover to the extent we anticipate during the next few quarters, causing credit metrics to remain very
