Fitch Ratings announced a downgrade of Huntsman Corp. (NYSE:HUN) and Huntsman International LLC to BB+ from BBB- and attached a negative outlook. In the same action Fitch lowered Huntsman International's unsecured notes to BB+ with a Recovery Rating of RR4 from BBB-, and assigned a rating of BBB-/RR2 to the company’s newly issued senior secured revolver.
Fitch attributed the rating action to Huntsman’s sustained weak profitability, which has fallen short of the agency’s prior expectations. The rating report states that Fitch expects the company’s performance and credit metrics to remain weak through 2026 and 2027. Central to the downgrade is an anticipated continuation of earnings weakness through 2027 after an estimated year-over-year decline of roughly 24% in Fitch-calculated EBITDA in 2025.
The agency highlighted a range of near-term pressures contributing to the subdued outlook. These include soft U.S. construction activity, upward pressure on U.S. energy and raw material costs, and persistent structural challenges in Europe. Collectively, Fitch sees these headwinds delaying a sustained recovery in operating results.
Leverage is a core concern for Fitch. The agency expects Huntsman’s leverage to remain above 4.0x through 2027 despite a gradual improvement in operating performance. Fitch-calculated leverage spiked to 7.9x in 2025, a move the report ties to historically low EBITDA and greater utilization of the company’s revolver.
Huntsman’s decision to cut its dividend by 65% is acknowledged as a positive step for cash preservation, but Fitch states this measure does not fully remove the company’s modestly negative free cash flow forecast through 2027.
Despite the downgrade, Fitch cited several stabilizing factors supporting the ratings. The agency noted roughly $1.0 billion of liquidity as of Dec. 31, 2025, pro forma for the revolver refinancing, and forecasted that EBITDA interest coverage should average above 4.0x over the assessment period. Ratings support also rests on Huntsman’s leading market positions across its sub-industries and a differentiated global manufacturing footprint.
The negative outlook reflects Fitch’s view that, given ongoing weak market conditions, leverage is likely to remain high for the rating level. Fitch said it may consider a further negative rating action if earnings deteriorate further or persist at trough levels for an extended period. Conversely, the outlook could be revised to stable if market conditions recover more quickly than Fitch currently anticipates, increasing confidence that the company can reduce leverage.
Summary of the action
- Long-term issuer ratings for Huntsman Corp. and Huntsman International LLC downgraded to BB+ from BBB-; negative outlook assigned.
- Huntsman International’s unsecured notes downgraded to BB+ with Recovery Rating RR4 from BBB-.
- New senior secured revolver assigned BBB-/RR2.