29 April 2009 11:27 [Source: ICIS news]
“BASF’s portfolio of chemicals contains around 40% of commodity products, the bulk of which are under severe volume and pricing pressure with no recovery in sight,” the credit watchdog said in a report.
Fitch added that BASF’s less-cyclical specialty chemicals sales were heavily exposed to the sharp downturn in the global automotive, construction and textile end-user markets.
Fitch downgraded the company’s long-term credit rating to A+ from AA-, reflecting the “gradual deterioration in BASF’s financial profile as a result of its shareholder-friendly policies and its acquisitive strategy”.
BASF’s rating was given a negative outlook on Fitch’s view that weaker market conditions or an aggressive financial policy could further reduce its ability to protect liquidity.
Fitch’s long term credit rating for Ciba, which was recently acquired by BASF, was upgraded to A+ from BBB before being dropped from coverage.
On 9 April, BASF closed its acquisition of Ciba and started the process of fully integrating the Swiss specialty chemicals producer into its operations.
The company reports its first quarter earnings on Thursday 30 April.
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