Research Update: Momentive Performance Materials Inc. Outlook Revised To Stable From Positive On Weaker Demand; 'B+' Rating Affirmed

We expect Momentive Performance Materials Inc. (MPM). will face a more difficult operating environment in 2023, as a result of customer inventory destocking, pricing pressure, and the potential for U.S.-recession-led demand weakness. We now forecast credit metrics will be modestly weaker than previously expected, with debt to EBITDA rising to above 6x by year-end. As a result, we revised our outlook to stable from positive and affirmed our 'B+' issuer-credit rating. The stable outlook reflects our expectation that, while credit metrics will deteriorate from 2022 levels, we expect MPM will generate a modest amount of cash over the coming 12 months, and will maintain weighted average debt to EBITDA within the 5.0x-6.0x range. The stable outlook reflects S&P Global Ratings'

...- We expect Momentive Performance Materials Inc. (MPM). will face a more difficult operating environment in 2023, as a result of customer inventory destocking, pricing pressure, and the potential for U.S.-recession-led demand weakness. - We now forecast credit metrics will be modestly weaker than previously expected, with debt to EBITDA rising to above 6x by year-end. - As a result, we revised our outlook to stable from positive and affirmed our 'B+' issuer-credit rating. - The stable outlook reflects our expectation that, while credit metrics will deteriorate from 2022 levels, we expect MPM will generate a modest amount of cash over the coming 12 months, and will maintain weighted average debt to EBITDA within the 5.0x-6.0x range....

Research Update