Silicones producer Momentive has received approval from its revolving credit facility lenders for a waiver of the senior secured leverage covenant for the next two quarters. In addition, management has indicated that in the third quarter of 2009 earnings have strengthened meaningfully from weak first- and second-quarter levels. We are placing all of our ratings on Momentive and its subsidiaries, including the 'CCC-' corporate credit rating, on CreditWatch with positive implications. We expect to resolve the CreditWatch within the next few weeks after discussions with management and forming a view regarding the sustainability of the earnings improvement and prospects for business conditions, earnings, cash flow, and liquidity during the next several quarters and covenant compliance following expiration of the waiver.
