Rating action and outlook
Fitch Ratings downgraded Olin Corporation's Long-Term Issuer Default Rating to 'BB+' from 'BBB-' and assigned a Negative Outlook. The agency also lowered Olin's unsecured notes to 'BB+' with a Recovery Rating of 'RR4' from 'BBB-'. At the same time, Fitch affirmed the company's revolver and Term Loan A at 'BBB-' and assigned those facilities a Recovery Rating of 'RR2'.
Rationale cited by Fitch
Fitch attributed the downgrade to an extended period of earnings weakness that has outpaced the agency's prior expectations, producing a difficult outlook for 2026. The agency said it expects Olin's profitability to remain under pressure and for leverage to stay above 4.0x over the medium term, despite certain credit strengths that continue to support the ratings.
Fitch highlighted several enduring company strengths that temper the downgrade, including Olin's leading positions in its markets, a historically competitive cost structure, significant vertical integration, reliable cash flow generation, and strong liquidity.
Earnings and sector pressures
The agency forecasts continued earnings weakness through 2026 after estimating roughly a 24% year-over-year decline in Fitch-calculated EBITDA for 2025. The 2026 outlook, Fitch said, is pressured by several specific factors:
- Persistent soft demand in construction and industrial end markets;
- Oversupply in chlorine derivatives;
- Higher energy costs that weigh on the Chlor Alkali and Vinyls segment.
Fitch also noted that near-term free cash flow will be constrained by anticipated one-time cash outflows, including litigation payments.
Leverage trajectory and company targets
Fitch expects the continued soft operating performance to keep Olin's leverage above 4.0x through 2027. The agency characterized the recent increase in leverage as largely earnings-driven rather than the result of a more aggressive financial policy, observing that total debt has remained broadly flat during the downturn. Olin has reiterated a long-term net leverage target of under 2.0x through the cycle.
Collateral and covenant amendment
The 'RR2' Recovery Rating on the revolver and Term Loan A reflects collateral added under a recently executed covenant amendment. Under the terms Fitch described, these facilities will be secured by certain assets of Olin and its subsidiary guarantors for the duration of the covenant relief period, which runs through 3Q27.