The rating also reflects our view of the business as commodity-like with a narrow focus of product offerings, and its relatively small scale in comparison with other chemicals players. While AI PLEX's current position is fairly protective in the current demand/price environment, we do not rule out the perspective of further commoditization of MMA and derivatives, on the back of decreasing global production costs and intensifying competition. SECTOR. Please consult your broker or financial representative to verify pricing before executing any trade. Our EBITDA adjustments relate mainly to operating lease rent for which we add back €8 million. Business diversity is helped by downstream product lines being included in the carve-out, bringing different market exposures and more specialized product features in sales and profitability.We view the production process for MMA as rather commodity-type, subject to cyclical demand patterns, and of which pricing is highly sensitive to supply/demand patterns and therefore highly volatile. Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.AI PLEX AcquiCo GmbH produces advanced materials. The Company offers its services in Germany.Moenckebergstrasse 31 / 5 OG The company's filing status is listed as Active and its File Number is 7407649. 77 Massachusetts Avenue Cambridge, MA 02139 617-253-1000 pr@ademcetinkaya.com Private equity Advent International is acquiring methyl-methacrylate (MMA) carve-out from Evonik, AI PLEX Holdco II GmbH, through the issuance of €1,485 million term loans and equity.We view the business as largely concentrated on cyclical and volatile commodity-type MMA, although mitigated by the company's favorable cost position including some vertical integration, sound market shares, and ongoing expansion into downstream products.Our base case factors in moderating market conditions in 2019-2020, after top-of-cycle environment on MMA supply constraints in recent years, resulting in our forecast adjusted gross debt to EBITDA of 6.0x-6.5x.We are therefore assigning our preliminary 'B' issuer credit rating to AI PLEX Holdco II GmbH (AI PLEX) and our preliminary 'B' issue ratings to the proposed senior secured debt, co-issued by AI PLEX Acquico GmbH.The stable outlook reflects our view that the business should be able to sustain adjusted debt to EBITDA in the 6.0x-6.5x range, seen as commensurate with the rating, , along with strong free cash flow and EBITDA interest coverage comfortably above 3.0x.PARIS (S&P Global Ratings) May 22, 2019--S&P Global Ratings today took the rating actions mentioned above.Our ratings are preliminary and will be converted to final upon receiving the final documentation of the instruments rated, provided all terms and conditions are aligned with our initial assumptions, including for terms and conditions of the non-common equity instruments factored in the structure.The rating on AI PLEX Holdo II primarily reflects high leverage at closing of the acquisition, with about 6.0x-6.5x adjusted gross debt to EBITDA. This is consistent with our view of the company's private equity ownership after the takeover, translating into highly leveraged funding structures and financial policies, both at closing and going forward. AI PLEX AcquiCo GmbH produces advanced materials. This could stem from a significantly higher-than-expected decline in MMA prices due to a large increase in market capacity such that market demand could not absorb it. We estimate that about 75% of current profits relate directly to upstream commodities (bulk monomers and MMA), which are highly sensitive to supply and demand patterns. Fitch Ratings - Barcelona - 23 May 2019: Fitch Ratings has assigned AI PLEX AcquiCo GmbH expected ratings for its Long-Term Issuer Default Rating (IDR) of 'B(EXP)' with a Stable Outlook and its senior secured ratings of 'B(EXP)'/'RR4'/45%, subject to receipt of final documents. Although difficult to estimate, we anticipate nonetheless that demand from key end markets will help absorb upcoming capacity additions, supporting continued MMA demand and resulting in AI PLEX's margins being sustained around 17%-18% and free cash flow remaining largely positive.Margin pressure is also mitigated by the company's strategy to expand downstream products, namely in molding compounds, methacrylate resins, and acrylic products. We also expect adequate liquidity and comfortable headroom under the covenants for the rating.Rating downside may arise should we see adjusted debt to EBITDA deteriorate to above 6.5x without short-term recovery prospects, and EBITDA cash interest decrease below 3.0x. We believe the business' vertical integration into hydrogen cyanide (HCN), sound market shares in MMA and derivatives, and further expansion into more specialty-type downstream products should help mitigate the expected market softening, sustaining strong free cash flow and leverage of 6.0x-6.5x, which we see as commensurate with the rating.Key drivers of AI PLEX's competitive position include its market position as a major global player in MMA markets: It is the second largest globally (12% market share) after Mitsubishi, and No. Ai Plex Us Acquico LLC is a Delaware Domestic Limited-Liability Company filed on May 7, 2019. INDUSTRY. We view cost position and operating efficiency in general as key aspects of the competitive position of commodity chemicals players, therefore we see risks coming from competing technology in the production of MMA, such as the alpha production process that appears highly cost competitive. 1 in Europe. Germany


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