Hexion Inc.'s debt leverage continues to be elevated as key cyclical end markets remain soft amid an economic slowdown, coupled with pressures on cash flow and coverage metrics due to high debt servicing requirements. We affirmed our 'B-' issuer credit rating on Hexion. We affirmed our 'B-' issue-level rating on the company's first-lien senior secured term loan. Our '3' recovery rating on the term loan is unchanged. We also affirmed our 'CCC+' issue-level rating on the company's second-lien senior secured term loan. Our '5' recovery rating on the term loan is unchanged. The outlook remains stable reflecting our expectation that the company will maintain credit metrics appropriate for the current rating despite generating modestly negative free cash flow in 2023.
