European loan traders said despite recent news surrounding Rhodia and Dynea International, the chemical companies' bank debt has not been seen trading. Both recently reported declining EBITDA in 2003, but the bank debt in both cases is very senior, traders said.
Rhodia recently posted losses of E1.351 billion for 2003 compared to a net loss of about E4 million in 2002. The company's net leverage multiple was about 7.4 times by year end, according to CreditSights. Late last year, Rhodia established a new E758 medium term-credit line, which replaced existing financing. Rhodia also reached an agreement with 23 of its banks to retain an existing E970 million credit line with adjusted covenants through June 30.
Finnish company Dynea International has obtained a waiver for potential breaches on its bank debt covenants in 2003 and has renegotiated covenants in 2004 to allow more flexibility. The company has approximately E239 million in bank debt and other senior debt under the Dynea International entity. Although Standard & Poor's recently confirmed the existing senior unsecured bank debt ratings at CCC, the outlook for the company is negative. On the plus side, Dynea International was also recently given a E31.7 million, six-year facility from its parent company, Dynea Oy, boosting its liquidity. Calls to officials at the two companies were not returned by press time.