Moody's on Oct. 7 revised its outlook on Eastman Chemical Co. to negative from stable, saying the company's credit metrics are expected to remain challenged amid weak economic conditions.
The economic environment would keep the company's leverage at around 3.0x over the next 12 to 18 months despite a modest reduction in debt, according to John Rogers, Moody's senior vice president and lead analyst for Eastman.
Moody's said Eastman Chemical is projected to cut debt by about $300 million by the end of 2019.
"Eastman's challenges will continue as industrial demand is likely to remain weak for the rest of 2019 and into 2020 along with a strong US dollar that remains a more modest headwind," Rogers said.
Moody's affirmed Eastman Chemical's issuer rating and senior unsecured ratings at Baa2. The rating agency said it would consider a ratings downgrade if the company fails to reduce leverage below 3.0x on an adjusted basis and increase the retained-cash-flow-to-debt ratio above 20%.
