Standard & Poor's Corp. lowered its ratings on Union Carbide Corp.'s debt to the lowest investment grade Tuesday because of the poisonous gas leak at Bhopal, India, that killed more than 2,000 people.
The change lowered the rating on Union Carbide's subordinated long-term debt to triple-B from A-minus and on its senior long-term debt to triple-B-plus from A.
Union Carbide called the downgrading "excessive."
"We don't believe the action was warranted by the facts or legal analysis of the Indian situation," J. Clayton Stephenson, Union Carbide's chief financial officer, said in a statment.
Standard & Poor's, one of the leading debt-rating firms, considers debt rated lower than triple-B speculative. Many institutional investors, such as pension funds and bank trust departments, are barred from investing in speculative securities.
The highest possible debt rating given by Standard & Poor's is triple-A; the lowest is D. The lower ratings, Standard & Poor's said, reflect the fact that as a result of the accident in Bhopal, Union Carbide's access to capital markets has been constrained and management will be diverted to defend the company against lawsuits.