Iran War Opens Brief Refinancing Window for European Chemicals

Article content(Bloomberg) — European chemical makers are seizing a brief window created by the Iran conflict to refinance debt, even as the industry’s structural downturn shows little sign of easing, according to Lazard Inc.’s Katja Ksoll.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentThe supply chain disruptions sparked by the war temporarily lifted sentiment for European producers, which are less exposed to feedstock shortages than their Asian rivals. At the same time, liquidity in credit markets has fueled investor demand for new deals, allowing cash-strapped chemical companies to extend maturities, said Ksoll, who heads Lazard’s debt advisory for Germany, Austria and Switzerland.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle content“Based on the strong performance and liquid capital market, now is a good time to get deals done,” Ksoll said in an interview.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentThe refinancing push comes as Europe’s chemical industry remains under severe financial pressure from years of weak demand, high energy costs and excess global capacity. Those conditions have squeezed cash flows across the sector, leaving many companies focused on preserving liquidity.Article contentNouryon, CABB Group GmbH, Lanxess AG and Ineos Group are among companies that recently refinanced debt, according to Bloomberg Intelligence. For firms still struggling with subdued demand, refinancing removes “the biggest headache,” allowing them to focus on operational improvements, Ksoll said.Article contentThe current market environment, however, may prove short-lived. As tensions between Iran and the US ease and the Strait of Hormuz is opening, investors are reassessing how long the temporary boost for European chemical producers can last.Article content“The refinancing window now appears to be closing for chemical companies,” said BI credit analyst Timothy Riminton, adding that chemicals are again returning to the bottom of the cycle. “The question is sort of how long does that take?”Article contentFor now, the supply-chain issues are still affecting industrial producers, Germany’s Ifo institute said Tuesday. Nearly 30% of chemical companies in Europe’s biggest economy are experiencing materials shortages, according to Ifo’s latest survey.Article content“It will likely take some time before international supply chains return to normal,” said Ifo’s head of surveys Klaus Wohlrabe.Article contentTrending Here's what Germany's submarine builder is bringing to Canada after winning defence contract Economy Posthaste: Canadian real estate could be poised for a rebound News 'I don't see the demand': Smith, Ford face doubters as they pitch new pipeline from Alberta to Ontario Energy Canada unleashes wave of oil drilling permits in next big play Oil & Gas Subscriber only. Garry Marr: It's time to get rid of the foreign buyers ban on housing, but don't expect it to save the market Subscriber only Real Estate Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. Here's what Germany's submarine builder is bringing to Canada after winning defence contract Economy Posthaste: Canadian real estate could be poised for a rebound News 'I don't see the demand': Smith, Ford face doubters as they pitch new pipeline from Alberta to Ontario Energy Canada unleashes wave of oil drilling permits in next big play Oil & Gas Subscriber only. Garry Marr: It's time to get rid of the foreign buyers ban on housing, but don't expect it to save the market Subscriber only Real Estate