Research Update: Momentive Performance Materials Downgraded To 'B+', Outlook Negative On Declining EBITDA Due To Weak Siloxane Prices

U.S.-based Momentive Performance Materials Inc. has seen consecutive quarters of weaker earnings and profitability given a significant reduction in siloxane prices and a negative impact from its exposure to a weaker automotive sector. As a result, we are lowering our issuer credit rating on Momentive to 'B+' from 'BB-'. At the same time, we are lowering our issue-level rating on the company's senior secured credit facility to 'B+' from 'BB-'. The '3' recovery rating remains unchanged, indicating our expectation for meaningful (50%-70%; rounded estimate: 50%) recovery in the event of a payment default. The negative outlook reflects the potential that we will lower our rating on Momentive in the next 12 months if siloxane prices remain at depressed levels for

...- U.S.-based Momentive Performance Materials Inc. has seen consecutive quarters of weaker earnings and profitability given a significant reduction in siloxane prices and a negative impact from its exposure to a weaker automotive sector. - As a result, we are lowering our issuer credit rating on Momentive to 'B+' from '##-'. - At the same time, we are lowering our issue-level rating on the company's senior secured credit facility to 'B+' from '##-'. The '3' recovery rating remains unchanged, indicating our expectation for meaningful (50%-70%; rounded estimate: 50%) recovery in the event of a payment default. - The negative outlook reflects the potential that we will lower our rating on Momentive in the next 12 months if siloxane prices remain at depressed levels for an extended period combined with continued weakness in the auto sector and it becomes evident the company's credit measures will not improve as we head into 2021....

Research Update