January 16, 2013 / 6:40 PM / 5 years ago

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 

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.

     -- 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, 
     -- Key Credit Factors: Business and Financial Risks In The Commodity And 
Specialty Chemical Industry, Nov. 20, 2008

Daniel Krauss, CFA, New York, (1) 347-979-5750; Paul J Kurias, New York, (1) 


TPC Group Inc.
 Corporate Credit Rating              B/Stable/--

Ratings Affirmed

TPC Group Inc.
 Senior Secured                       B
  Recovery Rating                     4
0 : 0
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