Research Update: Hexion Inc. Ratings Affirmed; Outlook Revised To Negative From Stable On Approaching $2.5 Billion Debt Maturity

Despite an ongoing attempt to divest assets to help address $2.5 billion in debt due in 2020, Hexion Inc. has not yet announced any sales, heightening our perceived risks about its ability to address these approaching maturities. We are revising our outlook on Hexion to negative from stable and affirming all ratings, including the 'CCC+' issuer credit rating. The negative outlook reflects the higher refinancing and liquidity risks associated with the upcoming maturities. We expect credit metrics to remain weak, with funds from operations (FFO) to debt in the low-single-digit percent area, and debt to EBITDA at unsustainable levels on a weighted average basis of historical and projected numbers. On Nov. 14, 2018, S&P Global Ratings affirmed its 'CCC+' corporate

...+ Despite an ongoing attempt to divest assets to help address $2.5 billion in debt due in 2020, Hexion Inc. has not yet announced any sales, heightening our perceived risks about its ability to address these approaching maturities. + We are revising our outlook on Hexion to negative from stable and affirming all ratings, including the '###+' issuer credit rating. + The negative outlook reflects the higher refinancing and liquidity risks associated with the upcoming maturities. + We expect credit metrics to remain weak, with funds from operations (FFO) to debt in the low-single-digit percent area, and debt to EBITDA at unsustainable levels on a weighted average basis of historical and projected numbers....

Research Update