Ineos Group - comment

We are not convinced that any chemical analyst can confidently forecast the sector’s short- to medium-term outlook beyond maintaining a cautious stance. S&P Global Ratings has aligned with this scepticism, downgrading the Ineos group structure. Ineos Group Holdings was downgraded to B+ from BB-, with the negative outlook maintained.

S&P’s rationale broadly mirrors our own assessment and prevailing market concerns, citing challenging industry conditions, weaker earnings and cash-flow generation, and the resulting deterioration in leverage metrics. Of particular relevance to Quattro, S&P now views Ineos Group Holdings and Ineos Quattro as highly strategic to Ineos Ltd., but judges that funding pressures at the parent level constrain the group’s capacity to provide timely financial support. This has led to reduced assumptions of internal group support, contributing to the downgrade.