Moody’s Ratings downgraded Huntsman International LLC’s senior unsecured ratings to Ba1 from Baa3, pushing the chemicals manufacturer out of investment-grade territory. The rating outlook remains negative, reflecting persistent macroeconomic pressures and weak demand across key sectors.

This downgrade follows a decline in Huntsman’s credit profile driven by lower earnings, increased leverage, and diminished financial flexibility.

Factors Behind the Downgrade

• Adjusted debt/EBITDA rose to 5.7x at the end of Q1 2025, up from 2.1x in 2022.
• Limited visibility on demand recovery, noting weak trends in construction, automotive, and European industrial sectors.
• Governance risks, highlighted by aggressive dividend payouts amid a downturn.
• Moody’s anticipates continued volatility in earnings and leverage, with adjusted debt/EBITDA averaging about 4.0x across the cycle.

The chemical sector has faced significant strain for over three years, and Huntsman’s reliance on cyclical products like MDI, maleic anhydride, and epoxy resins has exacerbated these challenges.

Global Demand Pressures and Trade Issues

Huntsman continues to grapple with several pressures:

• High U.S. interest rates impacting housing and construction sectors.
• Slow recovery in China’s property market.
• Industrial stagnation in Europe.
• Growing trade tensions affecting sentiment and customer orders.

Moody’s projects 2025 to be another challenging year, despite expectations of some demand normalization in 2026.

Continuous Monitoring of Financial Condition

Investors tracking Huntsman’s evolving financial condition can utilize:

Ratios and Earnings Calendar APIs to monitor real-time insights into Huntsman’s leverage and profitability metrics. Staying informed about upcoming earnings announcements will help gauge guidance changes post-downgrade.

Outlook: Cautious Road Ahead

Moody’s indicated potential cyclical upturns could benefit Huntsman, but near-term prospects remain challenging. Suboptimal capacity utilization and continued pricing pressure might limit recovery even if volumes increase.

Huntsman’s downgrade to speculative grade highlights the necessity for diligent examination of its capital allocation, earnings trajectory, and resilience against existing sector headwinds.