July 20 - After Cabot Corp. (BBB+/Negative/--) recently announced its plan to
acquire Norit N.V. (not rated), the parent company of Norit Holding B.V. (B+/Watch Pos/--), in a
$1.1 billion largely debt-funded transaction, Standard & Poor's Ratings Services
affirmed its ratings on Cabot. In a report titled "Credit FAQ: Why Standard &
Poor's Affirmed Its 'BBB+' Rating On Cabot Corp.," we answer questions on our
rating action and what we expect when Cabot completes the acquisition.
Cabot is a large global producer of carbon black (a petroleum product used
primarily as a pigment and in auto tires).
On July 9, 2012, Standard & Poor's affirmed its ratings on Cabot, including
its 'BBB+' corporate credit rating. Our rating outlook is negative. We removed
all ratings from CreditWatch with negative implications, where we placed them
on June 21 following Cabot's announcement.
We expect the acquisition to close by fiscal year end (Sept. 30, 2012). Cabot
plans to fund the acquisition using $600 million in notes, $250 million of
borrowings under a $750 million revolving credit facility, and $250 million of
cash on the balance sheet. We expect the revolving credit facility to increase
to $750 million from $550 million.