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  Title	Fitch Affirms Kronos Worldwide, Inc. at 'B+' Following Add-On Notes Offering; Outlook Stable
  ID	13002160
  External ID	8002144494
  Author	Unknown
  Published Date	Sept. 4, 2025, 4:45 a.m.
  Summary	Fitch Ratings has affirmed Kronos Worldwide, Inc. (Kronos) and its wholly owned subsidiary, Kronos International, Inc.'s Long-Term Issuer Default Rating (IDRs) at 'B+'. Fitch has also affirmed Kronos'
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  URL	https://www.marketscreener.com/news/fitch-affirms-kronos-worldwide-inc-at-b-following-add-on-notes-offering-outlook-stable-ce7d59dbd081f227
  Sentiment	Negative: 0.10560    Neutral: 0.05632    Positive: 0.83807
  Relevance	0.04054

• Content Details

  Content ID	8262564
  Key	f3cd530b-d109-40ad-a186-d1500e8629bc
  Content	Fitch Ratings has affirmed Kronos Worldwide, Inc. (Kronos) and its wholly owned subsidiary, Kronos International, Inc.'s Long-Term Issuer Default Rating (IDRs) at 'B+'. Fitch has also affirmed Kronos' ABL and Kronos International's 2029 senior secured notes at 'BB+' with a Recovery Rating of 'RR1'. The Rating Outlook remains Stable. Kronos' ratings reflect its plan to issue add-on senior secured notes to refinance its remaining EUR75 million senior secured notes due September 2025 . Kronos has strong liquidity, a modest debt load, conservative financial policy, and low capex needs. However, limited scale and exposure to the cyclical titanium dioxide (TiO2) industry contribute to cash flow volatility. Fitch expects TiO2 market conditions to remain soft through 2026, but Kronos' recent dividend reduction will support liquidity until conditions improve. The Stable Outlook reflects Fitch's expectations for EBITDA leverage to trend to 4.0x or below through 2026, despite below mid-cycle EBITDA, while maintaining comfortable liquidity. Key Rating Drivers Add-On Transaction Preserves Liquidity: Kronos plans to issue add-on senior secured notes to refinance its remaining EUR75 million senior secured notes due September 2025 . The transaction extends the 2025 maturity, preserves near-term liquidity amid prolonged industry weakness, and modestly increases long-term debt expectations relative to earlier plans to retire the note with cash on hand. Kronos' financial structure remains solid despite the incremental issuance and softer near-term demand outlook, with EBITDA leverage forecast to trend around or below 4.0x through 2026 on below mid-cycle EBITDA. Financial Flexibility Amid Cyclical Volatility: Fitch believes Kronos has sufficient financial flexibility to manage near-term earnings volatility, supported by adequate pro forma liquidity and management actions to curb discretionary spending until conditions stabilize. The company faces a weaker 2H25 outlook due to elevated trade uncertainty and deteriorating cyclical conditions in key TiO2 end-markets, notably architectural coatings and plastics. Longer-term fundamentals are underpinned by demand in these end-markets, EU anti-dumping resolutions regarding China , and capacity rationalization of higher-cost assets. Fitch anticipates a gradual recovery, with demand returning to historical levels by 2027 and supporting margin recovery to 10%. Reduced Dividend Supports Liquidity: Kronos' decision to reduce its quarterly dividend underscores solid financial flexibility and a credit-conscious stance by its majority owners amid ongoing TiO2 market softness. While the lower dividend does not alter Fitch's expectation for slightly negative FCF through 2026, it will help preserve liquidity until a cyclical recovery normalizes earnings. Fitch expects management to continue aligning dividends with operating cash flow. The reduced dividend should support a return to positive FCF around 2027 under mid-cycle conditions. Modest Debt Load: Fitch views Kronos' pro forma debt load as modest compared with normalized EBITDA for the company. We expect leverage to be temporarily elevated above 4.0x by year-end 2025 on a softer 2H25 cyclical demand outlook, before trending toward 3.0x by 2027 as performance normalizes. Limited Size and Diversification: Kronos is a pure-play pigment producer with limited scale and no diversification to buffer TiO2 industry volatility, exposing its cash flow and credit profile to market swings. This exposure is partially offset by solid liquidity and strong market positions in Europe and North America , though Fitch sees limited ability to affect global market dynamics. During the 2015-2016 TiO2 price downturn, Kronos' European EBITDA was severely constrained, despite its status as the largest TiO2 producer in Europe Parent-Subsidiary Linkage: Under our parent-subsidiary linkage criteria, Fitch rates the IDRs of Kronos and its wholly owned issuing subsidiary, Kronos International Inc. , using the parent consolidated profile. The approach reflects open legal ring-fencing and open access and control between the stronger subsidiary and Kronos. Peer Analysis Kronos' ratings reflect its relatively small size and limited diversification compared with peers in the TiO2 segment, while also reflecting its typically healthy leverage and generally neutral-to-positive cash flow profile. Compared with industry leaders The Chemours Co. and Tronox Ltd. (both unrated), Kronos has limited ability to influence TiO2 supply dynamics as a pure-play pigment producer. Tronox also benefits from a relatively greater degree of vertical integration, resulting in a stronger EBITDA margin profile than Kronos. Fitch believes Kronos' asset profile compares favorably to Venator Materials PLC (unrated), which emerged from a chapter 11 restructuring process in 2023, due to Kronos' increased production capacity of chloride-process TiO2 assets. Chloride-process TiO2 is considered a preferred product for most high-end applications and is produced at lower conversion costs. Key Assumptions Sales growth is minimal through 2026 on continued weakness in coatings end-markets, followed by moderate growth in 2027 and thereafter; EBITDA margins trend around the mid-single digits through 2026 on weak fixed cost absorption stemming from low utilization, before recovering to 10% by 2027; Capex of around $50 million annually in 2025, held around similar levels thereafter; Dividends held around $20 million annually through 2027, increasing towards historical levels thereafter; The 2025 notes are fully redeemed prior to maturity with proceeds from the 2029 notes add-on. Recovery Analysis Key Recovery Rating Assumptions The recovery analysis assumes Kronos would be reorganized as a going-concern in bankruptcy rather than liquidated. We have assumed a 10% administrative claim. Fitch assumes Kronos draws approximately $297 million under its ABL, representing about 85% of the full $350 million amount. This is due to the likelihood the ABL borrowing base will be lessened in a distressed scenario as the TiO2 pricing environment declines over time, which would gradually reduce the borrowing base. Going-Concern (GC) Approach Fitch used a going-concern EBITDA of $162 million to reflect a mid-cycle amount in a post-bankruptcy scenario, which would likely be around 2014/2016 levels. The GC EBITDA estimate reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which it bases the enterprise valuation. Specifically, the GC EBITDA depicts a sustained economic contraction in North America and EMEA, resulting in an extended period of severe volume headwinds, which leads to a material decline in EBITDA and cash generation. An enterprise value multiple of 5.5x EBITDA is applied to the GC EBITDA to calculate a post-reorganization enterprise value. The 5.5x multiple acknowledges the commoditized nature of Kronos' TiO2 products and its lack of diversification. The choice of this multiple considered historical bankruptcy case study exit multiples for peer companies, including Tronox Incorporated (2011) and Venator Materials PLC (2023). Under the pro forma scenario, Kronos' ABL and 2029 senior secured note recoveries both correspond to an 'RR1'. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Mid-cycle EBITDA leverage sustained above 4.0x, potentially stemming from material debt-funded acquisition activity; EBITDA interest coverage sustained below 3.5x, or sustained high utilization under the ABL, signaling deteriorating liquidity; Expectations of sustained negative FCF generation, potentially stemming from continued maintenance of dividend payments under persistently weak operating conditions, or a structural deterioration in the TiO2 market. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Increases in size, scale, or diversification leading to improved mid-cycle EBITDA size or cost position; Maintenance of current financial policies, leading to mid-cycle EBITDA Leverage sustained below 3.0x and continued robust financial flexibility; A structurally improved sector outlook that results in EBITDA margin resiliency and reduced FCF variability. Liquidity and Debt Structure Pro forma for the notes add-on, Fitch expects to retain strong liquidity consisting of around $30 million of cash and cash equivalents and $310 million in availability under its ABL revolver. The company has cut its dividend payment and paused certain growth capex projects in recent periods amidst the prolonged TiO2 slowdown, aiding liquidity. Pro forma for the notes add-on transaction, Kronos has no debt maturities until the senior secured notes in 2029. Issuer Profile Kronos Worldwide, Inc. is a pure-play TiO2 producer and the fifth largest producer of TiO2 in the world. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Click here to access Fitch's latest quarterly Global Corporates Macro and Sector Forecasts data file which aggregates key data points used in our credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. ESG Considerations Kronos Worldwide, Inc. has an ESG Relevance Score of '4' for Governance Structure due to significant 'key man risk' presented by its dominant shareholder. Approximately 81% of Kronos' common stock is indirectly owned by a family trust. Fitch expects the family trust to continue to be supportive of Kronos' conservative capital allocation policy and current operating strategy. This factor has a negative impact on the credit profile and is relevant to the ratings in conjunction with other factors. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on Fitch's ESG Relevance Scores, visit https://www.fitchratings.com/topics/esg/products#esg-relevance-scores (C) 2025 Electronic News Publishing, source ENP Newswire
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  Publisher URL	http://www.marketscreener.com
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  Trust Flow Score	23
  Citation Flow Score	26

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  Data Source Name	Quantexa News (#5)
  Data Source Type	news
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  Weight	10