Moody's Investors Service places Rockwood Specialties Group's Ba1 ratings under review for upgrade following announcement that Albemarle has entered into agreement to purchase Rockwood for approximately US$6.2B

Elyse Blye

NEW YORK , July 16, 2014 (press release) – Approximately $1.25 billion of rated debt on review

Moody's Investors Service placed Rockwood Specialties Group, Inc.'s (Rockwood) ratings under review for upgrade following the announcement that Albemarle Corporation (Albemarle, Baa1, ratings under review for downgrade) has entered into an agreement to acquire Rockwood for approximately $6.2 billion. Albemarle has stated it plans to guarantee Rockwood's outstanding $1.25 billion notes due 2020, which will remain outstanding following the acquisition.

Ratings placed under review:

Rockwood Specialties Group, Inc.

Corporate Family Rating - Ba1**

Probability of Default Rating - Ba1-PD**

Sr Unsec Notes due 2020 -- Ba1

Sr Unsec Shelf Registration -- (P)Ba1

Ratings unchanged:

Speculative Grade Liquidity Rating -- SGL-1

** Ratings to be withdrawn upon completion of the acquisition.

RATINGS RATIONALE

Under the acquisition terms announced, Rockwood shareholders will receive $50.65 in cash and 0.4803 shares of Albemarle common stock per Rockwood share. The transaction is expected to be financed with $1.5 billion of new debt financing, $2.2 billion of available cash and $2.5 billion of Albemarle stock (34.7 million new shares). The transaction is expected to close in the first quarter of 2015 and is subject to shareholder and regulatory approvals.

The review will focus on the ultimate capital structure and leverage following the transaction and the ability of Albemarle to delever and generate free cash flow after integrating both companies. The company has secured committed bridge financing from BofA Merrill Lynch to finance the cash portion of the transaction. The review of Rockwood's ratings for upgrade reflects the planned acquisition by Albemarle and the positive impact on Rockwood's credit profile.

Moody's notes that Albemarle stated its commitment to an investment grade rating. The company announced that it would focus on delevering following the transaction, suspend its share repurchases but maintain its current dividends and dividend growth. Based on our initial review of the terms of the deal, Albemarle will likely maintain its investment grade rating. Albemarle has also announced its intention to guarantee Rockwood's $1.25 billion of notes due 2020. Moody's will withdraw Rockwood's Corporate Family Rating (CFR) and Probability of Default Rating (PDR) upon completion of the acquisition.

The principal methodology used in this rating was the Global Chemical Industry Rating Methodology published in December 2013. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.

Rockwood Specialties Group, Inc., headquartered in Princeton, New Jersey, is a wholly owned subsidiary of Rockwood Holdings, Inc. (Ticker: ROC). Rockwood operates two core specialty chemicals businesses, surface treatment chemicals and lithium and lithium derivatives. Additionally, it is in the process of selling its titanium dioxide business and four other non-strategic businesses in a transaction expected to close by September 2014 for $1 billion in net cash proceeds. Revenues were approximately $1.4 billion for the twelve months ended March 31, 2014.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this rating action, and whose ratings may change as a result of this rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

James Wilkins
Vice President - Senior Analyst
Corporate Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Brian B Oak
MD - Corporate Finance
Corporate Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

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