Silicone producer Momentive's operating performance is very weak, and we believe there is a significant risk of a covenant breach in 2009. We are assigning ratings to Momentive's proposed second-lien notes offering. We are lowering several issue ratings based on our analysis of business fundamentals and recovery. The corporate credit, senior unsecured debt, and subordinated debt ratings remain on CreditWatch with negative implications pending completion of an exchange offer, which we deem to be distressed. On June 3, 2009, Standard&Poor's Ratings Services said that its 'CC' corporate credit rating on Momentive Performance Materials Inc. remains on CreditWatch with negative implications pending completion of an exchange offer, which we deem to be distressed. If the company completes the offer
