TEXT - S&P says TPC Group ratings unaffected by add-on
Jan 16 - Standard & Poor's Ratings Services today updated its recovery analysis on Houston, Texas-based TPC Group Inc. to reflect the company's proposed $100 million add-on to its existing $655 million senior secured notes. We have maintained our 'B' issue-level rating and '4' recovery rating on the senior secured notes, indicating our expectation of average (30% to 50%) recovery in the event of a payment default. We expect that the proceeds from the add-on offering will be used to pre-fund capital spending associated with the restart of one of the company's idle dehydrogenation units, which will produce on-purpose isobutylene. All of our other existing ratings on the company, including the 'B' corporate credit rating, remain unchanged. The outlook is stable. The ratings on TPC Group reflect its narrow product range of commodity compounds, limited customer and geographic diversity, cyclicality in its key markets, modest EBITDA margins, and very aggressive financial policies. These risk factors are partially offset by the company's favorable competitive position and our expectation that butadiene will remain structurally short over the next few years due to the shift toward light cracking. Standard & Poor's characterizes TPC Group's business risk as "weak" and its financial risk as "highly leveraged." For the latest corporate credit rating rationale, see Standard & Poor's research update on TPC Group, published Dec. 21, 2012, on RatingsDirect. For the complete recovery analysis, please see our recovery report on TPC Group to be published shortly after this report on RatingsDirect. RELATED CRITERIA AND RESEARCH -- Methodology and Assumptions: Standard & Poor's Standardizes Liquidity Descriptors For Global Corporate Issuers, July 2, 2010 -- Methodology: Business Risk/Financial Risk Matrix Expanded, Sept. 18, 2012 -- Key Credit Factors: Business and Financial Risks In The Commodity And Specialty Chemical Industry, Nov. 20, 2008 TEMPORARY CONTACT NUMBERS Daniel Krauss, CFA, New York, (1) 347-979-5750; Paul J Kurias, New York, (1) 917-880-4230 RATINGS LIST TPC Group Inc. Corporate Credit Rating B/Stable/-- Ratings Affirmed TPC Group Inc. Senior Secured B Recovery Rating 4
DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.