PQ Corporation -- Moody's affirms PQ's B3 CFR; rates $1.7 billion in proposed debt

New York, April 14, 2016 -- Moody's Investors Service affirmed PQ Corporation's ("PQ") B3 Corporate Family Rating ("CFR") and assigned ratings to $1.7 billion in proposed debt. Proceeds from the transaction, along with an additional $625 million of new unrated unsecured debt that will be placed with private holders, will be used to refinance all existing debt at PQ, refinance part of the existing debt at Eco Services Operations LLC ("Eco Services"), and pay transaction-related fees and expenses. The transaction is expected to occur concurrent with the intended merger of PQ and Eco Services, both majority-owned by the same financial sponsor, CCMP Capital Advisors, and will not include a refinancing Eco Services' $200 million Senior Unsecured Notes due 2022. The change of control provision in the indenture governing these notes will not be triggered, since the transaction will not result in a change in majority ownership for Eco Services. Moody's left these notes and all ratings for Eco Services on review for possible downgrade pending the completion of the proposed merger and refinancing transactions. Moody's expects to downgrade these notes to Caa2 from Caa1 based on the B3 CFR of the combined company and under the assumption that they will rank pari passu with the new privately-placed notes. The rating outlook for PQ is stable.

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