Research Update: GrafTech International Ltd. Downgraded To 'CCC+' On Uncertain Pace Of Recovery; Outlook Negative

Market conditions remain challenging and we expect GrafTech International Ltd. will burn through most of its cash balance by the middle of 2025, after which we expect it could become reliant on its cash flow revolver for liquidity needs. We see GrafTech's capital structure as unsustainable, given its elevated debt levels, depressed earnings, and high interest expenses, and its reliance on favorable market conditions to meet its financial obligations over the longer term. As a result, we lowered our issuer credit rating on GrafTech, to 'CCC+' from 'B-'. At the same time, we lowered our issue-level rating on the company's senior secured notes to 'B-' from 'B'; the '2' recovery rating remains unchanged. Our negative outlook reflects our view of

...- Market conditions remain challenging and we expect GrafTech International Ltd. will burn through most of its cash balance by the middle of 2025, after which we expect it could become reliant on its cash flow revolver for liquidity needs. - We see GrafTech's capital structure as unsustainable, given its elevated debt levels, depressed earnings, and high interest expenses, and its reliance on favorable market conditions to meet its financial obligations over the longer term. - As a result, we lowered our issuer credit rating on GrafTech, to '###+' from 'B-'. - At the same time, we lowered our issue-level rating on the company's senior secured notes to 'B-' from 'B'; the '2' recovery rating remains unchanged. - Our negative outlook reflects our view of uncertainty around the pace and timing of a recovery under current market conditions and the risk of a liquidity deficit if volumes and earnings do not recover in the next 12 months....

Research Update