S&P raises ratings for Georgia Gulf
Standard & Poor's boosts ratings on Georgia Gulf after merger with PPG chemical business
ATLANTA (AP) -- Standard & Poor's Ratings Services raised some credit ratings for Georgia Gulf Corp. on Tuesday, saying the company's risk profile will improve after it merges with PPG Industries Inc.'s chemicals business.
Atlanta-based chemical and building products maker Georgia Gulf Corp. announced the deal Monday, saying it will buy the chemical business in a deal valued at about $2.1 billion, including debt in the stock-for-stock exchange.
S&P said that the combined company will benefit from its larger scale and low natural gas prices, as well as from an expected recovery in U.S. housing markets.
S&P raised Georgia Gulf's corporate credit rating to "BB" from "BB-," which is still a junk or noninvestment grade. It also raised its current senior secured notes to "BBB-" from "BB," nudging them just into investment grade.
S&P said it might raise ratings "slightly" over the longer term if the company reduces debt.
Georgia Gulf shares fell $1.92, or 3.8 percent, to close at $48.47.
