Tronox (TROX) Comments on S&P Rating Change; Expects Bump Higher in Interest Cost

Tronox (NYSE: TROX) reaffirmed its commitment to reducing leverage and continuing its current dividend payment. This reaffirmation comes in response to the rating change announced earlier today by Standard & Poor's. Citing continued softness in TiO2 pigment pricing, Standard & Poor's lowered the company's debt rating by one notch. The company believes the impact of this action will be to increase its annual interest cost by approximately $3.7 million. Tronox believes there is no incremental risk to its debt or the company as a whole after this rating change than there was before it. Other than a 1% mandatory principal amortization payment on its Term Loan each year, the company has no principal maturities until 2020 and no maintenance covenants in its Term Loan or Indentures. Tronox also has a strong liquidity position with $405 million of Revolver capacity available and no significant cash depletion or default risk.

Tronox was fully aware of the pricing trends in TiO2 pigment when it reiterated its commitment to a program that will allow the company to meet its' operating and capital needs, while also reducing its leverage and continuing to pay current dividends. Tronox remains confident that its plan to fulfill its debt service obligations and dividend payments, while achieving free cash flow positive status in 2016, remains on track and believes there is no risk associated with the full satisfaction of its obligations under any of its debt facilities.

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