Fitch downgrades Olin's stock rating due to weak profit outlook

LootboxPhobia · 2026-02-20T19:31:39+00:00

Fitch Ratings downgraded Olin Corporation's long-term default rating from "BBB-" to "BB+" and assigned a negative outlook, reflecting its continued weak profitability and challenging future prospects. The leverage ratio is expected to remain above 4.0x, mainly due to market demand and cost pressures. Nevertheless, Olin still maintains a strong market position and cash flow.

LootboxPhobia

2026-02-20 19:31:39

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Investing.com - Fitch Ratings today downgraded Olin Corporation (NYSE:OLN)'s long-term issuer default rating from “BBB-” to “BB+” and assigned a negative outlook. The agency also downgraded Olin’s unsecured note rating from “BBB-” to “BB+”, restored the rating to “RR4,” and confirmed the revolving credit and A-term loan ratings at “BBB-”, restoring the rating to “RR2.”

The downgrade reflects Olin’s ongoing weak profitability, which has performed worse than Fitch’s expectations, and challenging prospects through 2026. Fitch expects earnings to remain under pressure, with leverage remaining above 4.0x in the medium term. The rating is still supported by Olin’s leading market position, historically competitive cost structure, high vertical integration, solid cash flow generation, and strong liquidity.

Fitch expects that, after a roughly 24% year-over-year decline in EBITDA in 2025, Olin’s weak profitability will persist through 2026. The challenging outlook before 2026 is due to continued weak demand in construction and industrial end markets, oversupply of chlorinated derivatives, and rising energy costs putting pressure on chlor-alkali and vinyl products divisions. Recent free cash flow has been constrained by expected one-time cash outflows, including litigation settlements.

Fitch anticipates that sustained weak performance will keep leverage above 4.0x until 2027. The agency believes that the recent increase in leverage is mainly driven by earnings rather than more aggressive financial policies, as total debt has remained relatively stable during economic downturns. Olin recently reaffirmed its long-term net leverage target of maintaining below 2.0x over the cycle.

Olin’s revolving credit and A-term loans received an “RR2” recovery rating, reflecting the collateral added during recent covenant amendments. During the covenant waiver period, these financings will be secured by certain assets of Olin and its subsidiary guarantors, lasting through Q3 2027.

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